Correlation Between OFX Group and DeFi Technologies

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

By analyzing existing cross correlation between OFX Group Ltd and DeFi Technologies, you can compare the effects of market volatilities on OFX Group and DeFi Technologies 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 OFX Group with a short position of DeFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and DeFi Technologies.

Diversification Opportunities for OFX Group and DeFi Technologies

0.0

Correlation Coefficient

OFX Group  DeFi Technologies

Pay attention - limited upside

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

Pair Corralation between OFX Group and DeFi Technologies

If you would invest  299.00  in DeFi Technologies on December 24, 2024 and sell it today you would lose (10.00) from holding DeFi Technologies or give up 3.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

OFX Group Ltd  vs.  DeFi Technologies

OFX Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days OFX Group Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, OFX Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

DeFi Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DeFi Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DeFi Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with OFX Group and DeFi Technologies

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

The idea behind OFX Group Ltd and DeFi Technologies 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.