Correlation Between EuroDry and Omnia Wellness

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

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

Diversification Opportunities for EuroDry and Omnia Wellness

0.0

Correlation Coefficient

EuroDry  Omnia Wellness

Pay attention - limited upside

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

Pair Corralation between EuroDry and Omnia Wellness

If you would invest  0.02  in Omnia Wellness on February 6, 2024 and sell it today you would earn a total of  0.00  from holding Omnia Wellness or generate 0.0% return on investment over 90 days.

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

EuroDry  vs.  Omnia Wellness

EuroDry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EuroDry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, EuroDry is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Omnia Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omnia Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Omnia Wellness 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 EuroDry and Omnia Wellness

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

The idea behind EuroDry and Omnia Wellness 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .