Correlation Between OOhMedia and Viva Leisure

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

By analyzing existing cross correlation between oOhMedia and Viva Leisure, you can compare the effects of market volatilities on OOhMedia and Viva Leisure 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 OOhMedia with a short position of Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOhMedia and Viva Leisure.

Diversification Opportunities for OOhMedia and Viva Leisure

-0.53

Correlation Coefficient

OOhMedia  Viva Leisure

Excellent diversification

The 3 months correlation between OOhMedia and Viva is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding oOhMedia and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure and OOhMedia 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 oOhMedia are associated (or correlated) with Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of OOhMedia i.e., OOhMedia and Viva Leisure go up and down completely randomly.

Pair Corralation between OOhMedia and Viva Leisure

Assuming the 90 days trading horizon oOhMedia is expected to under-perform the Viva Leisure. But the stock apears to be less risky and, when comparing its historical volatility, oOhMedia is 1.42 times less risky than Viva Leisure. The stock trades about -0.11 of its potential returns per unit of risk. The Viva Leisure is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  133.00  in Viva Leisure on October 8, 2024 and sell it today you would earn a total of  10.00  from holding Viva Leisure or generate 7.52% return on investment over 90 days.

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

oOhMedia  vs.  Viva Leisure

oOhMedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days oOhMedia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, OOhMedia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Viva Leisure

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viva Leisure are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Viva Leisure unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OOhMedia and Viva Leisure

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

The idea behind oOhMedia and Viva Leisure 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.