Correlation Between Omega Flex and Symbotic

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

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

Diversification Opportunities for Omega Flex and Symbotic

0.36

Correlation Coefficient

Omega Flex  Symbotic

Weak diversification

The 3 months correlation between Omega and Symbotic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Omega Flex and Symbotic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symbotic and Omega Flex 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 Omega Flex are associated (or correlated) with Symbotic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symbotic has no effect on the direction of Omega Flex i.e., Omega Flex and Symbotic go up and down completely randomly.

Pair Corralation between Omega Flex and Symbotic

Given the investment horizon of 90 days Omega Flex is expected to under-perform the Symbotic. But the stock apears to be less risky and, when comparing its historical volatility, Omega Flex is 3.84 times less risky than Symbotic. The stock trades about -0.08 of its potential returns per unit of risk. The Symbotic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,241  in Symbotic on September 16, 2024 and sell it today you would earn a total of  446.00  from holding Symbotic or generate 19.9% return on investment over 90 days.

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

Omega Flex  vs.  Symbotic

Omega Flex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Flex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Symbotic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Symbotic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Symbotic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omega Flex and Symbotic

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

The idea behind Omega Flex and Symbotic 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.