Correlation Between Sit Government and Ophmr Eml

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

By analyzing existing cross correlation between Sit Government Securities and Ophmr Eml Dbt, you can compare the effects of market volatilities on Sit Government and Ophmr Eml 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 Sit Government with a short position of Ophmr Eml. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Ophmr Eml.

Diversification Opportunities for Sit Government and Ophmr Eml

0.88

Correlation Coefficient

Sit Government  Ophmr Eml

Very poor diversification

The 3 months correlation between Sit and Ophmr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Ophmr Eml Dbt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophmr Eml Dbt and Sit Government 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 Sit Government Securities are associated (or correlated) with Ophmr Eml. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophmr Eml Dbt has no effect on the direction of Sit Government i.e., Sit Government and Ophmr Eml go up and down completely randomly.

Pair Corralation between Sit Government and Ophmr Eml

Assuming the 90 days horizon Sit Government Securities is expected to generate 0.7 times more return on investment than Ophmr Eml. However, Sit Government Securities is 1.43 times less risky than Ophmr Eml. It trades about 0.12 of its potential returns per unit of risk. Ophmr Eml Dbt is currently generating about -0.03 per unit of risk. If you would invest  1,020  in Sit Government Securities on September 15, 2024 and sell it today you would earn a total of  5.00  from holding Sit Government Securities or generate 0.49% return on investment over 90 days.

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

Sit Government Securities  vs.  Ophmr Eml Dbt

Sit Government Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sit Government Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Sit Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ophmr Eml Dbt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ophmr Eml Dbt has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Ophmr Eml is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sit Government and Ophmr Eml

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

The idea behind Sit Government Securities and Ophmr Eml Dbt 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.