Correlation Between OFAL and NV5 Global

Can any of the company-specific risk be diversified away by investing in both OFAL and NV5 Global 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 OFAL and NV5 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OFAL and NV5 Global, you can compare the effects of market volatilities on OFAL and NV5 Global 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 OFAL with a short position of NV5 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFAL and NV5 Global.

Diversification Opportunities for OFAL and NV5 Global

-0.3

Correlation Coefficient

OFAL  NV5 Global

Very good diversification

The 3 months correlation between OFAL and NV5 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding OFAL and NV5 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV5 Global and OFAL 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 OFAL are associated (or correlated) with NV5 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV5 Global has no effect on the direction of OFAL i.e., OFAL and NV5 Global go up and down completely randomly.

Pair Corralation between OFAL and NV5 Global

Given the investment horizon of 90 days OFAL is expected to under-perform the NV5 Global. In addition to that, OFAL is 14.84 times more volatile than NV5 Global. It trades about -0.06 of its total potential returns per unit of risk. NV5 Global is currently generating about 0.05 per unit of volatility. If you would invest  2,205  in NV5 Global on May 17, 2025 and sell it today you would earn a total of  51.00  from holding NV5 Global or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

OFAL  vs.  NV5 Global

OFAL

Risk-Adjusted Performance

Weakest

Over the last 90 days OFAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

NV5 Global

Risk-Adjusted Performance

Soft

Over the last 90 days NV5 Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, NV5 Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with OFAL and NV5 Global

The main advantage of trading using opposite OFAL and NV5 Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFAL position performs unexpectedly, NV5 Global 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 NV5 Global will offset losses from the drop in NV5 Global's long position.

The idea behind OFAL and NV5 Global 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.