Correlation Between ELLINGTON FINL and OSB GROUP
Can any of the company-specific risk be diversified away by investing in both ELLINGTON FINL and OSB GROUP 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 ELLINGTON FINL and OSB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELLINGTON FINL INC and OSB GROUP PLC, you can compare the effects of market volatilities on ELLINGTON FINL and OSB GROUP 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 ELLINGTON FINL with a short position of OSB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELLINGTON FINL and OSB GROUP.
Diversification Opportunities for ELLINGTON FINL and OSB GROUP
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELLINGTON and OSB is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ELLINGTON FINL INC and OSB GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSB GROUP PLC and ELLINGTON FINL 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 ELLINGTON FINL INC are associated (or correlated) with OSB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSB GROUP PLC has no effect on the direction of ELLINGTON FINL i.e., ELLINGTON FINL and OSB GROUP go up and down completely randomly.
Pair Corralation between ELLINGTON FINL and OSB GROUP
Assuming the 90 days horizon ELLINGTON FINL INC is expected to generate 0.41 times more return on investment than OSB GROUP. However, ELLINGTON FINL INC is 2.45 times less risky than OSB GROUP. It trades about 0.08 of its potential returns per unit of risk. OSB GROUP PLC is currently generating about -0.02 per unit of risk. If you would invest 1,046 in ELLINGTON FINL INC on September 25, 2024 and sell it today you would earn a total of 114.00 from holding ELLINGTON FINL INC or generate 10.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ELLINGTON FINL INC vs. OSB GROUP PLC
Performance |
Timeline |
ELLINGTON FINL INC |
OSB GROUP PLC |
ELLINGTON FINL and OSB GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ELLINGTON FINL and OSB GROUP
The main advantage of trading using opposite ELLINGTON FINL and OSB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELLINGTON FINL position performs unexpectedly, OSB GROUP 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 OSB GROUP will offset losses from the drop in OSB GROUP's long position.ELLINGTON FINL vs. Mr Cooper Group | ELLINGTON FINL vs. OSB GROUP PLC | ELLINGTON FINL vs. FIRST NATIONAL FIN | ELLINGTON FINL vs. Deutsche Pfandbriefbank AG |
OSB GROUP vs. Mr Cooper Group | OSB GROUP vs. FIRST NATIONAL FIN | OSB GROUP vs. Deutsche Pfandbriefbank AG | OSB GROUP vs. ELLINGTON FINL INC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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