Correlation Between Owens Minor and Old Dominion

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Owens Minor and Old Dominion 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 Owens Minor and Old Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Owens Minor and Old Dominion Freight, you can compare the effects of market volatilities on Owens Minor and Old Dominion 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 Owens Minor with a short position of Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Minor and Old Dominion.

Diversification Opportunities for Owens Minor and Old Dominion

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Owens and Old Dominion is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Owens Minor and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight and Owens Minor 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 Owens Minor are associated (or correlated) with Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Owens Minor i.e., Owens Minor and Old Dominion go up and down completely randomly.

Pair Corralation between Owens Minor and Old Dominion

Considering the 90-day investment horizon Owens Minor is expected to under-perform the Old Dominion. In addition to that, Owens Minor is 1.07 times more volatile than Old Dominion Freight. It trades about -0.04 of its total potential returns per unit of risk. Old Dominion Freight is currently generating about 0.01 per unit of volatility. If you would invest  31,545  in Old Dominion Freight on May 14, 2022 and sell it today you would lose (294.00)  from holding Old Dominion Freight or give up 0.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Owens Minor  vs.  Old Dominion Freight

 Performance (%) 
       Timeline  
Owens Minor 
Owens Performance
0 of 100
Over the last 90 days Owens Minor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Owens Minor is not utilizing all of its potentials. The new stock price disturbance, may contribute to mid-run losses for the stockholders.

Owens Price Channel

Old Dominion Freight 
Old Dominion Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Old Dominion Freight are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Old Dominion revealed solid returns over the last few months and may actually be approaching a breakup point.

Old Dominion Price Channel

Owens Minor and Old Dominion Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Owens Minor and Old Dominion

The main advantage of trading using opposite Owens Minor and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Minor position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.
The idea behind Owens Minor and Old Dominion Freight 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go