Correlation Between Ondo and BNT

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

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

Diversification Opportunities for Ondo and BNT

0.85

Correlation Coefficient

Ondo  BNT

Very poor diversification

The 3 months correlation between Ondo and BNT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ondo and BNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNT and Ondo 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 Ondo are associated (or correlated) with BNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNT has no effect on the direction of Ondo i.e., Ondo and BNT go up and down completely randomly.

Pair Corralation between Ondo and BNT

Assuming the 90 days trading horizon Ondo is expected to generate 24.67 times less return on investment than BNT. In addition to that, Ondo is 1.14 times more volatile than BNT. It trades about 0.0 of its total potential returns per unit of risk. BNT is currently generating about 0.1 per unit of volatility. If you would invest  55.00  in BNT on May 7, 2025 and sell it today you would earn a total of  14.00  from holding BNT or generate 25.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Ondo  vs.  BNT

Ondo

Risk-Adjusted Performance

Weakest

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

BNT

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in BNT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BNT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ondo and BNT

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

The idea behind Ondo and BNT 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 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.