Correlation Between Rosslyn Data and Overstock

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

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

Diversification Opportunities for Rosslyn Data and Overstock

0.5

Correlation Coefficient

Rosslyn Data  Overstock

Very weak diversification

The 3 months correlation between Rosslyn and Overstock is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Rosslyn Data Technologies and Overstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstock and Rosslyn Data 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 Rosslyn Data Technologies are associated (or correlated) with Overstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstock has no effect on the direction of Rosslyn Data i.e., Rosslyn Data and Overstock go up and down completely randomly.

Pair Corralation between Rosslyn Data and Overstock

Assuming the 90 days trading horizon Rosslyn Data Technologies is expected to under-perform the Overstock. But the stock apears to be less risky and, when comparing its historical volatility, Rosslyn Data Technologies is 3.22 times less risky than Overstock. The stock trades about -0.2 of its potential returns per unit of risk. The Overstock is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  483.00  in Overstock on December 24, 2024 and sell it today you would earn a total of  34.00  from holding Overstock or generate 7.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Rosslyn Data Technologies  vs.  Overstock

Rosslyn Data Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rosslyn Data Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Overstock

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Rosslyn Data and Overstock

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

The idea behind Rosslyn Data Technologies and Overstock 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.