Correlation Between Woolworths Group and Om Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Woolworths Group and Om Holdings 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 Woolworths Group and Om Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woolworths Group Limited and Om Holdings International, you can compare the effects of market volatilities on Woolworths Group and Om Holdings 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 Woolworths Group with a short position of Om Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woolworths Group and Om Holdings.

Diversification Opportunities for Woolworths Group and Om Holdings

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Woolworths and OMHI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Woolworths Group Limited and Om Holdings International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Om Holdings International and Woolworths Group 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 Woolworths Group Limited are associated (or correlated) with Om Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Om Holdings International has no effect on the direction of Woolworths Group i.e., Woolworths Group and Om Holdings go up and down completely randomly.

Pair Corralation between Woolworths Group and Om Holdings

Assuming the 90 days horizon Woolworths Group Limited is expected to generate 0.26 times more return on investment than Om Holdings. However, Woolworths Group Limited is 3.79 times less risky than Om Holdings. It trades about -0.07 of its potential returns per unit of risk. Om Holdings International is currently generating about -0.12 per unit of risk. If you would invest  2,250  in Woolworths Group Limited on September 2, 2024 and sell it today you would lose (360.00) from holding Woolworths Group Limited or give up 16.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy93.85%
ValuesDaily Returns

Woolworths Group Limited  vs.  Om Holdings International

 Performance 
       Timeline  
Woolworths Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Woolworths Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Om Holdings International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Om Holdings International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Woolworths Group and Om Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Woolworths Group and Om Holdings

The main advantage of trading using opposite Woolworths Group and Om Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woolworths Group position performs unexpectedly, Om Holdings 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 Om Holdings will offset losses from the drop in Om Holdings' long position.
The idea behind Woolworths Group Limited and Om Holdings International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Global Correlations
Find global opportunities by holding instruments from different markets
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like