Correlation Between IQ Global and OBP Capital

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

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

Diversification Opportunities for IQ Global and OBP Capital

0.69

Correlation Coefficient

IQ Global  OBP Capital

Poor diversification

The 3 months correlation between WRND and OBP is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding IQ Global Equity and OBP Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBP Capital and IQ 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 IQ Global Equity are associated (or correlated) with OBP Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBP Capital has no effect on the direction of IQ Global i.e., IQ Global and OBP Capital go up and down completely randomly.

Pair Corralation between IQ Global and OBP Capital

Given the investment horizon of 90 days IQ Global Equity is expected to generate 1.66 times more return on investment than OBP Capital. However, IQ Global is 1.66 times more volatile than OBP Capital. It trades about 0.1 of its potential returns per unit of risk. OBP Capital is currently generating about 0.01 per unit of risk. If you would invest  1,928  in IQ Global Equity on September 20, 2024 and sell it today you would earn a total of  1,012  from holding IQ Global Equity or generate 52.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	25.0%
Values	Daily Returns

IQ Global Equity  vs.  OBP Capital

IQ Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQ Global Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IQ Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

OBP Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OBP Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, OBP Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IQ Global and OBP Capital

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

The idea behind IQ Global Equity and OBP Capital 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.