Correlation Between Olympia Financial and Bip Investment

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

Diversification Opportunities for Olympia Financial and Bip Investment

OlympiaBipDiversified AwayOlympiaBipDiversified Away100%
0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Olympia and Bip is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and Bip Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bip Investment Corp and Olympia Financial 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 Olympia Financial Group are associated (or correlated) with Bip Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bip Investment Corp has no effect on the direction of Olympia Financial i.e., Olympia Financial and Bip Investment go up and down completely randomly.

Pair Corralation between Olympia Financial and Bip Investment

Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 1.84 times more return on investment than Bip Investment. However, Olympia Financial is 1.84 times more volatile than Bip Investment Corp. It trades about 0.15 of its potential returns per unit of risk. Bip Investment Corp is currently generating about 0.1 per unit of risk. If you would invest  9,681  in Olympia Financial Group on September 26, 2024 and sell it today you would earn a total of  1,219  from holding Olympia Financial Group or generate 12.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Olympia Financial Group  vs.  Bip Investment Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -4-20246810
JavaScript chart by amCharts 3.21.15OLY BIK-PA
       Timeline  
Olympia Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Olympia Financial Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Olympia Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec95100105110
Bip Investment Corp 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bip Investment Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Bip Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec25.625.82626.226.426.626.82727.2

Olympia Financial and Bip Investment Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.95-2.95-1.96-0.970.01761.052.113.164.22 0.20.40.60.8
JavaScript chart by amCharts 3.21.15OLY BIK-PA
       Returns  

Pair Trading with Olympia Financial and Bip Investment

The main advantage of trading using opposite Olympia Financial and Bip Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial position performs unexpectedly, Bip Investment 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 Bip Investment will offset losses from the drop in Bip Investment's long position.
The idea behind Olympia Financial Group and Bip Investment Corp 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.

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