Correlation Between Omni Health and Caf Serendipity

Can any of the company-specific risk be diversified away by investing in both Omni Health and Caf Serendipity 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 Omni Health and Caf Serendipity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Omni Health and Caf Serendipity Holdings, you can compare the effects of market volatilities on Omni Health and Caf Serendipity 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 Omni Health with a short position of Caf Serendipity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Health and Caf Serendipity.

Diversification Opportunities for Omni Health and Caf Serendipity

0.0

Correlation Coefficient

Omni Health  Caf Serendipity

Pay attention - limited upside

The 3 months correlation between Omni and Caf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Omni Health and Caf Serendipity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caf Serendipity Holdings and Omni Health 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 Omni Health are associated (or correlated) with Caf Serendipity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caf Serendipity Holdings has no effect on the direction of Omni Health i.e., Omni Health and Caf Serendipity go up and down completely randomly.

Pair Corralation between Omni Health and Caf Serendipity

If you would invest  0.10  in Caf Serendipity Holdings on September 13, 2024 and sell it today you would lose (0.08) from holding Caf Serendipity Holdings or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Omni Health  vs.  Caf Serendipity Holdings

Omni Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Caf Serendipity Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Caf Serendipity Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Caf Serendipity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Omni Health and Caf Serendipity

The main advantage of trading using opposite Omni Health and Caf Serendipity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Health position performs unexpectedly, Caf Serendipity 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 Caf Serendipity will offset losses from the drop in Caf Serendipity's long position.

The idea behind Omni Health and Caf Serendipity Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.