Correlation Between Onxeo SA and M/I Homes

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

Diversification Opportunities for Onxeo SA and M/I Homes

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Onxeo and M/I is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Onxeo SA and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes and Onxeo SA 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 Onxeo SA are associated (or correlated) with M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of Onxeo SA i.e., Onxeo SA and M/I Homes go up and down completely randomly.

Pair Corralation between Onxeo SA and M/I Homes

Assuming the 90 days horizon Onxeo SA is expected to under-perform the M/I Homes. In addition to that, Onxeo SA is 2.77 times more volatile than MI Homes. It trades about -0.02 of its total potential returns per unit of risk. MI Homes is currently generating about 0.22 per unit of volatility. If you would invest  13,755  in MI Homes on September 3, 2024 and sell it today you would earn a total of  1,720  from holding MI Homes or generate 12.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Onxeo SA  vs.  MI Homes

 Performance 
       Timeline  
Onxeo SA 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Onxeo SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Onxeo SA reported solid returns over the last few months and may actually be approaching a breakup point.
M/I Homes 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in MI Homes are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, M/I Homes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Onxeo SA and M/I Homes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Onxeo SA and M/I Homes

The main advantage of trading using opposite Onxeo SA and M/I Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onxeo SA position performs unexpectedly, M/I Homes 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 M/I Homes will offset losses from the drop in M/I Homes' long position.
The idea behind Onxeo SA and MI Homes 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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