Correlation Between Winmark and Otc Markets

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

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

Diversification Opportunities for Winmark and Otc Markets

0.79

Correlation Coefficient

Winmark  Otc Markets

Poor diversification

The 3 months correlation between Winmark and Otc is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Otc Markets Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otc Markets Group and Winmark 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 Winmark are associated (or correlated) with Otc Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otc Markets Group has no effect on the direction of Winmark i.e., Winmark and Otc Markets go up and down completely randomly.

Pair Corralation between Winmark and Otc Markets

Given the investment horizon of 90 days Winmark is expected to under-perform the Otc Markets. In addition to that, Winmark is 1.31 times more volatile than Otc Markets Group. It trades about -0.2 of its total potential returns per unit of risk. Otc Markets Group is currently generating about -0.15 per unit of volatility. If you would invest  5,260  in Otc Markets Group on December 19, 2024 and sell it today you would lose (600.00) from holding Otc Markets Group or give up 11.41% of portfolio value over 90 days.

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

Winmark  vs.  Otc Markets Group

Winmark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Winmark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Otc Markets Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Otc Markets Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Winmark and Otc Markets

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

The idea behind Winmark and Otc Markets Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.