Correlation Between OFX Group and LGBTQ Loyalty

Can any of the company-specific risk be diversified away by investing in both OFX Group and LGBTQ Loyalty 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 LGBTQ Loyalty 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 LGBTQ Loyalty Holdings, you can compare the effects of market volatilities on OFX Group and LGBTQ Loyalty 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 LGBTQ Loyalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and LGBTQ Loyalty.

Diversification Opportunities for OFX Group and LGBTQ Loyalty

0.0

Correlation Coefficient

OFX Group  LGBTQ Loyalty

Pay attention - limited upside

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

Pair Corralation between OFX Group and LGBTQ Loyalty

Assuming the 90 days horizon OFX Group Ltd is expected to under-perform the LGBTQ Loyalty. But the pink sheet apears to be less risky and, when comparing its historical volatility, OFX Group Ltd is 2.58 times less risky than LGBTQ Loyalty. The pink sheet trades about -0.01 of its potential returns per unit of risk. The LGBTQ Loyalty Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.04  in LGBTQ Loyalty Holdings on September 4, 2024 and sell it today you would lose (0.03) from holding LGBTQ Loyalty Holdings or give up 75.0% of portfolio value over 90 days.

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

OFX Group Ltd  vs.  LGBTQ Loyalty Holdings

OFX Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OFX Group Ltd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, OFX Group showed solid returns over the last few months and may actually be approaching a breakup point.

LGBTQ Loyalty Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LGBTQ Loyalty Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, LGBTQ Loyalty is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with OFX Group and LGBTQ Loyalty

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

The idea behind OFX Group Ltd and LGBTQ Loyalty Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.