Correlation Between OAR RESOURCES and Computershare

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

By analyzing existing cross correlation between OAR RESOURCES LTD and Computershare Limited, you can compare the effects of market volatilities on OAR RESOURCES and Computershare 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 OAR RESOURCES with a short position of Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAR RESOURCES and Computershare.

Diversification Opportunities for OAR RESOURCES and Computershare

0.27

Correlation Coefficient

OAR RESOURCES  Computershare

Modest diversification

The 3 months correlation between OAR and Computershare is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding OAR RESOURCES LTD and Computershare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare Limited and OAR RESOURCES 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 OAR RESOURCES LTD are associated (or correlated) with Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare Limited has no effect on the direction of OAR RESOURCES i.e., OAR RESOURCES and Computershare go up and down completely randomly.

Pair Corralation between OAR RESOURCES and Computershare

Assuming the 90 days horizon OAR RESOURCES LTD is expected to generate 10.18 times more return on investment than Computershare. However, OAR RESOURCES is 10.18 times more volatile than Computershare Limited. It trades about 0.13 of its potential returns per unit of risk. Computershare Limited is currently generating about 0.18 per unit of risk. If you would invest  1.00  in OAR RESOURCES LTD on September 17, 2024 and sell it today you would earn a total of  1.55  from holding OAR RESOURCES LTD or generate 155.0% return on investment over 90 days.

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

OAR RESOURCES LTD  vs.  Computershare Limited

OAR RESOURCES LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OAR RESOURCES LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, OAR RESOURCES reported solid returns over the last few months and may actually be approaching a breakup point.

Computershare Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Computershare reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OAR RESOURCES and Computershare

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

The idea behind OAR RESOURCES LTD and Computershare Limited 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.