Correlation Between Ondo and Core

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

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

Diversification Opportunities for Ondo and Core

0.41

Correlation Coefficient

Ondo  Core

Very weak diversification

The 3 months correlation between Ondo and Core is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ondo and Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core has no effect on the direction of Ondo i.e., Ondo and Core go up and down completely randomly.

Pair Corralation between Ondo and Core

Assuming the 90 days trading horizon Ondo is expected to generate 0.95 times more return on investment than Core. However, Ondo is 1.05 times less risky than Core. It trades about 0.01 of its potential returns per unit of risk. Core is currently generating about -0.02 per unit of risk. If you would invest  71.00  in Ondo on August 4, 2024 and sell it today you would lose (4.00) from holding Ondo or give up 5.63% of portfolio value over 90 days.

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

Ondo  vs.  Core

Ondo

Risk-Adjusted Performance

0 of 100

Very Weak

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.

Core

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ondo and Core

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

The idea behind Ondo and Core 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 Commodity Directory module to find actively traded commodities issued by global exchanges.