Correlation Between RB Global and Opus Magnum

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

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

Diversification Opportunities for RB Global and Opus Magnum

0.0

Correlation Coefficient

RB Global  Opus Magnum

Pay attention - limited upside

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

Pair Corralation between RB Global and Opus Magnum

Considering the 90-day investment horizon RB Global is expected to generate 0.2 times more return on investment than Opus Magnum. However, RB Global is 4.96 times less risky than Opus Magnum. It trades about 0.11 of its potential returns per unit of risk. Opus Magnum Ameris is currently generating about -0.08 per unit of risk. If you would invest  6,249  in RB Global on September 4, 2024 and sell it today you would earn a total of  3,465  from holding RB Global or generate 55.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RB Global  vs.  Opus Magnum Ameris

RB Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RB Global are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, RB Global sustained solid returns over the last few months and may actually be approaching a breakup point.

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with RB Global and Opus Magnum

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

The idea behind RB Global and Opus Magnum Ameris 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.