Correlation Between Osmosis and LAMB
Can any of the company-specific risk be diversified away by investing in both Osmosis and LAMB 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 Osmosis and LAMB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osmosis and LAMB, you can compare the effects of market volatilities on Osmosis and LAMB 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 Osmosis with a short position of LAMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osmosis and LAMB.
Diversification Opportunities for Osmosis and LAMB
Very good diversification
The 3 months correlation between Osmosis and LAMB is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Osmosis and LAMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMB and Osmosis 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 Osmosis are associated (or correlated) with LAMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMB has no effect on the direction of Osmosis i.e., Osmosis and LAMB go up and down completely randomly.
Pair Corralation between Osmosis and LAMB
Assuming the 90 days trading horizon Osmosis is expected to under-perform the LAMB. But the crypto coin apears to be less risky and, when comparing its historical volatility, Osmosis is 2.19 times less risky than LAMB. The crypto coin trades about -0.3 of its potential returns per unit of risk. The LAMB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 0.84 in LAMB on February 7, 2024 and sell it today you would lose (0.18) from holding LAMB or give up 21.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Osmosis vs. LAMB
Performance |
Timeline |
Osmosis |
LAMB |
Osmosis and LAMB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Osmosis and LAMB
The main advantage of trading using opposite Osmosis and LAMB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osmosis position performs unexpectedly, LAMB 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 LAMB will offset losses from the drop in LAMB's long position.The idea behind Osmosis and LAMB 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Stocks Directory Find actively traded stocks across global markets | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |