Correlation Between Oron Group and Creative Media

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

By analyzing existing cross correlation between Oron Group Investments and Creative Media Community, you can compare the effects of market volatilities on Oron Group and Creative Media 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 Oron Group with a short position of Creative Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oron Group and Creative Media.

Diversification Opportunities for Oron Group and Creative Media

-0.13

Correlation Coefficient

Oron Group  Creative Media

Good diversification

The 3 months correlation between Oron and Creative is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Oron Group Investments and Creative Media Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Media Community and Oron Group 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 Oron Group Investments are associated (or correlated) with Creative Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Media Community has no effect on the direction of Oron Group i.e., Oron Group and Creative Media go up and down completely randomly.

Pair Corralation between Oron Group and Creative Media

Assuming the 90 days trading horizon Oron Group is expected to generate 43.36 times less return on investment than Creative Media. But when comparing it to its historical volatility, Oron Group Investments is 72.81 times less risky than Creative Media. It trades about 0.19 of its potential returns per unit of risk. Creative Media Community is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  19,200  in Creative Media Community on October 26, 2024 and sell it today you would earn a total of  8,350  from holding Creative Media Community or generate 43.49% return on investment over 90 days.

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

Oron Group Investments  vs.  Creative Media Community

Oron Group Investments

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oron Group Investments are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oron Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Creative Media Community

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Media Community are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Creative Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oron Group and Creative Media

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

The idea behind Oron Group Investments and Creative Media Community 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.

Check out your portfolio center.

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.