Correlation Between Oasis Labs and Oasis City

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

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

Diversification Opportunities for Oasis Labs and Oasis City

0.98

Correlation Coefficient

Oasis Labs  Oasis City

Almost no diversification

The 3 months correlation between Oasis and Oasis is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Labs and Oasis City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis City and Oasis Labs 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 Oasis Labs are associated (or correlated) with Oasis City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis City has no effect on the direction of Oasis Labs i.e., Oasis Labs and Oasis City go up and down completely randomly.

Pair Corralation between Oasis Labs and Oasis City

Assuming the 90 days trading horizon Oasis Labs is expected to under-perform the Oasis City. In addition to that, Oasis Labs is 1.22 times more volatile than Oasis City. It trades about -0.24 of its total potential returns per unit of risk. Oasis City is currently generating about -0.16 per unit of volatility. If you would invest  3.22  in Oasis City on December 30, 2024 and sell it today you would lose (1.42) from holding Oasis City or give up 44.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Oasis Labs  vs.  Oasis City

Oasis Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oasis Labs 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 Crypto's 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 Oasis Labs shareholders.

Oasis City

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oasis City 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 Crypto's basic 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 Oasis City shareholders.

Pair Trading with Oasis Labs and Oasis City

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

The idea behind Oasis Labs and Oasis City 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.