Correlation Between OHTL Public and ASSET WORLD

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

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

Diversification Opportunities for OHTL Public and ASSET WORLD

0.08

Correlation Coefficient

OHTL Public  ASSET WORLD

Significant diversification

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

Pair Corralation between OHTL Public and ASSET WORLD

Assuming the 90 days trading horizon OHTL Public is expected to generate 0.66 times more return on investment than ASSET WORLD. However, OHTL Public is 1.52 times less risky than ASSET WORLD. It trades about -0.1 of its potential returns per unit of risk. ASSET WORLD P is currently generating about -0.13 per unit of risk. If you would invest  39,700  in OHTL Public on September 15, 2024 and sell it today you would lose (4,100) from holding OHTL Public or give up 10.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

OHTL Public  vs.  ASSET WORLD P

OHTL Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OHTL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

ASSET WORLD P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASSET WORLD P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with OHTL Public and ASSET WORLD

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

The idea behind OHTL Public and ASSET WORLD P 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.