Correlation Between Strickland Metals and OOhMedia

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

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

Diversification Opportunities for Strickland Metals and OOhMedia

-0.52

Correlation Coefficient

Strickland Metals  OOhMedia

Excellent diversification

The 3 months correlation between Strickland and OOhMedia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia and Strickland Metals 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 Strickland Metals are associated (or correlated) with OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Strickland Metals i.e., Strickland Metals and OOhMedia go up and down completely randomly.

Pair Corralation between Strickland Metals and OOhMedia

Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the OOhMedia. But the stock apears to be less risky and, when comparing its historical volatility, Strickland Metals is 1.42 times less risky than OOhMedia. The stock trades about -0.09 of its potential returns per unit of risk. The oOhMedia is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  117.00  in oOhMedia on December 2, 2024 and sell it today you would earn a total of  33.00  from holding oOhMedia or generate 28.21% return on investment over 90 days.

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

Strickland Metals  vs.  oOhMedia

Strickland Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strickland Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Strickland Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

oOhMedia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in oOhMedia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, OOhMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strickland Metals and OOhMedia

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

The idea behind Strickland Metals and oOhMedia 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.