Correlation Between Princeton Fund and OBP Capital

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Can any of the company-specific risk be diversified away by investing in both Princeton Fund and OBP Capital 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 Princeton Fund and OBP Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Princeton Fund Advisors and OBP Capital, you can compare the effects of market volatilities on Princeton Fund and OBP Capital 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 Princeton Fund with a short position of OBP Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Princeton Fund and OBP Capital.

Diversification Opportunities for Princeton Fund and OBP Capital

PrincetonOBPDiversified AwayPrincetonOBPDiversified Away100%
-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Princeton and OBP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Fund Advisors and OBP Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBP Capital and Princeton Fund 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 Princeton Fund Advisors are associated (or correlated) with OBP Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBP Capital has no effect on the direction of Princeton Fund i.e., Princeton Fund and OBP Capital go up and down completely randomly.

Pair Corralation between Princeton Fund and OBP Capital

If you would invest (100.00) in OBP Capital on September 29, 2024 and sell it today you would earn a total of  100.00  from holding OBP Capital or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy0.0%
ValuesDaily Returns

Princeton Fund Advisors  vs.  OBP Capital

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-8-6-4-202
JavaScript chart by amCharts 3.21.15AILV UVDV
       Timeline  
Princeton Fund Advisors 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Princeton Fund Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Princeton Fund is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
OBP Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days OBP Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, OBP Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Princeton Fund and OBP Capital Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.79-1.36-0.93-0.5-0.08920.240.671.11.531.96 0.20.40.60.81.01.21.4
JavaScript chart by amCharts 3.21.15AILV UVDV
       Returns  

Pair Trading with Princeton Fund and OBP Capital

The main advantage of trading using opposite Princeton Fund and OBP Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Princeton Fund position performs unexpectedly, OBP Capital 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 OBP Capital will offset losses from the drop in OBP Capital's long position.
The idea behind Princeton Fund Advisors and OBP Capital 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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