Correlation Between O I and Retailing Portfolio

Can any of the company-specific risk be diversified away by investing in both O I and Retailing Portfolio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining O I and Retailing Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between O I Glass and Retailing Portfolio Retailing, you can compare the effects of market volatilities on O I and Retailing Portfolio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in O I with a short position of Retailing Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of O I and Retailing Portfolio.

Diversification Opportunities for O I and Retailing Portfolio

0.31

Correlation Coefficient

O I  Retailing Portfolio

Weak diversification

The 3 months correlation between O I and Retailing is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Retailing Portfolio Retailing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Portfolio and O I is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on O I Glass are associated (or correlated) with Retailing Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Portfolio has no effect on the direction of O I i.e., O I and Retailing Portfolio go up and down completely randomly.

Pair Corralation between O I and Retailing Portfolio

Allowing for the 90-day total investment horizon O I is expected to generate 2.61 times less return on investment than Retailing Portfolio. In addition to that, O I is 3.34 times more volatile than Retailing Portfolio Retailing. It trades about 0.03 of its total potential returns per unit of risk. Retailing Portfolio Retailing is currently generating about 0.23 per unit of volatility. If you would invest  1,945  in Retailing Portfolio Retailing on September 2, 2024 and sell it today you would earn a total of  248.00  from holding Retailing Portfolio Retailing or generate 12.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

O I Glass  vs.  Retailing Portfolio Retailing

O I Glass

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in O I Glass are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, O I is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Retailing Portfolio

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Retailing Portfolio Retailing are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Retailing Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with O I and Retailing Portfolio

The main advantage of trading using opposite O I and Retailing Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O I position performs unexpectedly, Retailing Portfolio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Retailing Portfolio will offset losses from the drop in Retailing Portfolio's long position.

The idea behind O I Glass and Retailing Portfolio Retailing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.