Correlation Between OMGC and AE

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

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

Diversification Opportunities for OMGC and AE

0.0

Correlation Coefficient

OMGC  AE

Pay attention - limited upside

The 3 months correlation between OMGC and AE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OMGC and AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AE and OMGC 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 OMGC are associated (or correlated) with AE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AE has no effect on the direction of OMGC i.e., OMGC and AE go up and down completely randomly.

Pair Corralation between OMGC and AE

If you would invest  2.73  in AE on September 1, 2024 and sell it today you would earn a total of  0.91  from holding AE or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

OMGC  vs.  AE

OMGC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OMGC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, OMGC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AE

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OMGC and AE

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

The idea behind OMGC and AE 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.