Correlation Between Onex Corp and Dividend Growth
Can any of the company-specific risk be diversified away by investing in both Onex Corp and Dividend Growth 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 Onex Corp and Dividend Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onex Corp and Dividend Growth Split, you can compare the effects of market volatilities on Onex Corp and Dividend Growth 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 Onex Corp with a short position of Dividend Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onex Corp and Dividend Growth.
Diversification Opportunities for Onex Corp and Dividend Growth
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Onex and Dividend is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Onex Corp and Dividend Growth Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Growth Split and Onex Corp 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 Onex Corp are associated (or correlated) with Dividend Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Growth Split has no effect on the direction of Onex Corp i.e., Onex Corp and Dividend Growth go up and down completely randomly.
Pair Corralation between Onex Corp and Dividend Growth
Assuming the 90 days trading horizon Onex Corp is expected to under-perform the Dividend Growth. But the stock apears to be less risky and, when comparing its historical volatility, Onex Corp is 1.02 times less risky than Dividend Growth. The stock trades about -0.05 of its potential returns per unit of risk. The Dividend Growth Split is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Dividend Growth Split on January 19, 2024 and sell it today you would earn a total of 78.00 from holding Dividend Growth Split or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onex Corp vs. Dividend Growth Split
Performance |
| Timeline |
| Onex Corp |
| Dividend Growth Split |
Onex Corp and Dividend Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onex Corp and Dividend Growth
The main advantage of trading using opposite Onex Corp and Dividend Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onex Corp position performs unexpectedly, Dividend Growth 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 Dividend Growth will offset losses from the drop in Dividend Growth's long position.The idea behind Onex Corp and Dividend Growth Split 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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