Correlation Between OFX Group and Via Renewables
Can any of the company-specific risk be diversified away by investing in both OFX Group and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on OFX Group and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFX Group and Via Renewables.
Diversification Opportunities for OFX Group and Via Renewables
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between OFX and Via is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding OFX Group Ltd and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of OFX Group i.e., OFX Group and Via Renewables go up and down completely randomly.
Pair Corralation between OFX Group and Via Renewables
Assuming the 90 days horizon OFX Group Ltd is expected to under-perform the Via Renewables. In addition to that, OFX Group is 1.34 times more volatile than Via Renewables. It trades about -0.01 of its total potential returns per unit of risk. Via Renewables is currently generating about 0.03 per unit of volatility. If you would invest 1,742 in Via Renewables on September 20, 2024 and sell it today you would earn a total of 553.00 from holding Via Renewables or generate 31.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
OFX Group Ltd vs. Via Renewables
Performance |
Timeline |
OFX Group |
Via Renewables |
OFX Group and Via Renewables Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OFX Group and Via Renewables
The main advantage of trading using opposite OFX Group and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFX Group position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.OFX Group vs. John Wiley Sons | OFX Group vs. Modine Manufacturing | OFX Group vs. Tesla Inc | OFX Group vs. Rivian Automotive |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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