Correlation Between Onxeo SA and Power Assets
Can any of the company-specific risk be diversified away by investing in both Onxeo SA and Power Assets 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 Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onxeo SA and Power Assets Holdings, you can compare the effects of market volatilities on Onxeo SA and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onxeo SA and Power Assets.
Diversification Opportunities for Onxeo SA and Power Assets
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Onxeo and Power is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Onxeo SA and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of Onxeo SA i.e., Onxeo SA and Power Assets go up and down completely randomly.
Pair Corralation between Onxeo SA and Power Assets
Assuming the 90 days horizon Onxeo SA is expected to generate 6.79 times more return on investment than Power Assets. However, Onxeo SA is 6.79 times more volatile than Power Assets Holdings. It trades about 0.04 of its potential returns per unit of risk. Power Assets Holdings is currently generating about 0.02 per unit of risk. If you would invest 7.73 in Onxeo SA on September 16, 2024 and sell it today you would lose (0.39) from holding Onxeo SA or give up 5.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Onxeo SA vs. Power Assets Holdings
Performance |
Timeline |
Onxeo SA |
Power Assets Holdings |
Onxeo SA and Power Assets Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Onxeo SA and Power Assets
The main advantage of trading using opposite Onxeo SA and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onxeo SA position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.Onxeo SA vs. Moderna | Onxeo SA vs. BioNTech SE | Onxeo SA vs. Superior Plus Corp | Onxeo SA vs. SIVERS SEMICONDUCTORS AB |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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