Correlation Between Opus Magnum and IFAN Financial

Can any of the company-specific risk be diversified away by investing in both Opus Magnum and IFAN Financial 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 IFAN Financial 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 IFAN Financial, you can compare the effects of market volatilities on Opus Magnum and IFAN Financial 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 IFAN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opus Magnum and IFAN Financial.

Diversification Opportunities for Opus Magnum and IFAN Financial

0.0

Correlation Coefficient

Opus Magnum  IFAN Financial

Pay attention - limited upside

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

Pair Corralation between Opus Magnum and IFAN Financial

Given the investment horizon of 90 days Opus Magnum Ameris is expected to generate 1.61 times more return on investment than IFAN Financial. However, Opus Magnum is 1.61 times more volatile than IFAN Financial. It trades about 0.06 of its potential returns per unit of risk. IFAN Financial is currently generating about 0.08 per unit of risk. If you would invest  0.01  in Opus Magnum Ameris on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Opus Magnum Ameris or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Opus Magnum Ameris  vs.  IFAN Financial

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.

IFAN Financial

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Opus Magnum and IFAN Financial

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

The idea behind Opus Magnum Ameris and IFAN Financial 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.