Correlation Between Omega Gerao and Arezzo Indstria

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

By analyzing existing cross correlation between Omega Gerao SA and Arezzo Indstria e, you can compare the effects of market volatilities on Omega Gerao and Arezzo Indstria 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 Omega Gerao with a short position of Arezzo Indstria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omega Gerao and Arezzo Indstria.

Diversification Opportunities for Omega Gerao and Arezzo Indstria

0.0

Correlation Coefficient

Omega Gerao  Arezzo Indstria

Pay attention - limited upside

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

Pair Corralation between Omega Gerao and Arezzo Indstria

If you would invest (100.00) in Omega Gerao SA on February 22, 2024 and sell it today you would earn a total of  100.00  from holding Omega Gerao SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Omega Gerao SA  vs.  Arezzo Indstria e

Omega Gerao SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omega Gerao SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Omega Gerao is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Arezzo Indstria e

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arezzo Indstria e has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Omega Gerao and Arezzo Indstria

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

The idea behind Omega Gerao SA and Arezzo Indstria e 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.