Correlation Between OMGC and STRAX

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

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

Diversification Opportunities for OMGC and STRAX

0.0

Correlation Coefficient

OMGC  STRAX

Pay attention - limited upside

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

Pair Corralation between OMGC and STRAX

If you would invest  4.37  in STRAX on August 30, 2024 and sell it today you would earn a total of  2.85  from holding STRAX or generate 65.22% return on investment over 90 days.

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

OMGC  vs.  STRAX

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

STRAX

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STRAX are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, STRAX exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OMGC and STRAX

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

The idea behind OMGC and STRAX 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 Commodity Directory module to find actively traded commodities issued by global exchanges.