Correlation Between Omni Small-cap and Multifactor
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap and Multifactor 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 Omni Small-cap and Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Multifactor Equity Fund, you can compare the effects of market volatilities on Omni Small-cap and Multifactor 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 Omni Small-cap with a short position of Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Multifactor.
Diversification Opportunities for Omni Small-cap and Multifactor
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Omni and Multifactor is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value and Multifactor Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifactor Equity and Omni Small-cap 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 Omni Small Cap Value are associated (or correlated) with Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifactor Equity has no effect on the direction of Omni Small-cap i.e., Omni Small-cap and Multifactor go up and down completely randomly.
Pair Corralation between Omni Small-cap and Multifactor
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 2.18 times more return on investment than Multifactor. However, Omni Small-cap is 2.18 times more volatile than Multifactor Equity Fund. It trades about 0.17 of its potential returns per unit of risk. Multifactor Equity Fund is currently generating about 0.22 per unit of risk. If you would invest 1,683 in Omni Small Cap Value on June 8, 2025 and sell it today you would earn a total of 243.00 from holding Omni Small Cap Value or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Multifactor Equity Fund
Performance |
| Timeline |
| Omni Small Cap |
| Multifactor Equity |
Omni Small-cap and Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and Multifactor
The main advantage of trading using opposite Omni Small-cap and Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap position performs unexpectedly, Multifactor 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 Multifactor will offset losses from the drop in Multifactor's long position.| Omni Small-cap vs. Aggressive Investors 1 | Omni Small-cap vs. Bridgeway Global Opportunities | Omni Small-cap vs. Ultra Small Pany Market | Omni Small-cap vs. Small Cap Value Fund |
| Multifactor vs. Vanguard Strategic Small Cap | Multifactor vs. Blackrock Diversified Fixed | Multifactor vs. Victory Diversified Stock | Multifactor vs. Elfun Diversified Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
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