Correlation Between OPUS GLOBAL and 4iG Nyrt

Can any of the company-specific risk be diversified away by investing in both OPUS GLOBAL and 4iG Nyrt 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 OPUS GLOBAL and 4iG Nyrt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OPUS GLOBAL Nyrt and 4iG Nyrt, you can compare the effects of market volatilities on OPUS GLOBAL and 4iG Nyrt 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 OPUS GLOBAL with a short position of 4iG Nyrt. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPUS GLOBAL and 4iG Nyrt.

Diversification Opportunities for OPUS GLOBAL and 4iG Nyrt

0.84

Correlation Coefficient

OPUS GLOBAL  4iG Nyrt

Very poor diversification

The 3 months correlation between OPUS and 4iG is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding OPUS GLOBAL Nyrt and 4iG Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4iG Nyrt and OPUS GLOBAL 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 OPUS GLOBAL Nyrt are associated (or correlated) with 4iG Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4iG Nyrt has no effect on the direction of OPUS GLOBAL i.e., OPUS GLOBAL and 4iG Nyrt go up and down completely randomly.

Pair Corralation between OPUS GLOBAL and 4iG Nyrt

Assuming the 90 days trading horizon OPUS GLOBAL Nyrt is expected to generate 1.04 times more return on investment than 4iG Nyrt. However, OPUS GLOBAL is 1.04 times more volatile than 4iG Nyrt. It trades about 0.14 of its potential returns per unit of risk. 4iG Nyrt is currently generating about 0.07 per unit of risk. If you would invest  45,900  in OPUS GLOBAL Nyrt on September 3, 2024 and sell it today you would earn a total of  4,700  from holding OPUS GLOBAL Nyrt or generate 10.24% return on investment over 90 days.

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

OPUS GLOBAL Nyrt  vs.  4iG Nyrt

OPUS GLOBAL Nyrt

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OPUS GLOBAL Nyrt are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OPUS GLOBAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

4iG Nyrt

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 4iG Nyrt are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, 4iG Nyrt is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with OPUS GLOBAL and 4iG Nyrt

The main advantage of trading using opposite OPUS GLOBAL and 4iG Nyrt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPUS GLOBAL position performs unexpectedly, 4iG Nyrt 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 4iG Nyrt will offset losses from the drop in 4iG Nyrt's long position.

The idea behind OPUS GLOBAL Nyrt and 4iG Nyrt 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.