Correlation Between Opus Magnum and Bellatora

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

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

Diversification Opportunities for Opus Magnum and Bellatora

0.0

Correlation Coefficient

Opus Magnum  Bellatora

Pay attention - limited upside

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

Pair Corralation between Opus Magnum and Bellatora

If you would invest  64.00  in Bellatora on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Bellatora or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Opus Magnum Ameris  vs.  Bellatora

Opus Magnum Ameris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Opus Magnum Ameris has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Opus Magnum is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Bellatora

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bellatora are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Bellatora reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Opus Magnum and Bellatora

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

The idea behind Opus Magnum Ameris and Bellatora 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.