Correlation Between Opal Balance and M Yochananof

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

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

Diversification Opportunities for Opal Balance and M Yochananof

0.29

Correlation Coefficient

Opal Balance  M Yochananof

Modest diversification

The 3 months correlation between Opal and YHNF is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Opal Balance and M Yochananof and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Yochananof and Opal Balance 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 Opal Balance are associated (or correlated) with M Yochananof. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Yochananof has no effect on the direction of Opal Balance i.e., Opal Balance and M Yochananof go up and down completely randomly.

Pair Corralation between Opal Balance and M Yochananof

Assuming the 90 days trading horizon Opal Balance is expected to generate 1.14 times more return on investment than M Yochananof. However, Opal Balance is 1.14 times more volatile than M Yochananof and. It trades about 0.23 of its potential returns per unit of risk. M Yochananof and is currently generating about 0.08 per unit of risk. If you would invest  19,258  in Opal Balance on December 2, 2024 and sell it today you would earn a total of  4,542  from holding Opal Balance or generate 23.59% return on investment over 90 days.

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

Opal Balance  vs.  M Yochananof and

Opal Balance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Opal Balance are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Opal Balance sustained solid returns over the last few months and may actually be approaching a breakup point.

M Yochananof

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in M Yochananof and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, M Yochananof may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Opal Balance and M Yochananof

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

The idea behind Opal Balance and M Yochananof and 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.