Correlation Between Locafy and Opera
Can any of the company-specific risk be diversified away by investing in both Locafy and Opera 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 Locafy and Opera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locafy and Opera, you can compare the effects of market volatilities on Locafy and Opera 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 Locafy with a short position of Opera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locafy and Opera.
Diversification Opportunities for Locafy and Opera
Good diversification
The 3 months correlation between Locafy and Opera is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Locafy and Opera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opera and Locafy 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 Locafy are associated (or correlated) with Opera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opera has no effect on the direction of Locafy i.e., Locafy and Opera go up and down completely randomly.
Pair Corralation between Locafy and Opera
Given the investment horizon of 90 days Locafy is expected to generate 5.29 times more return on investment than Opera. However, Locafy is 5.29 times more volatile than Opera. It trades about 0.04 of its potential returns per unit of risk. Opera is currently generating about 0.05 per unit of risk. If you would invest 671.00 in Locafy on June 6, 2025 and sell it today you would lose (138.00) from holding Locafy or give up 20.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locafy vs. Opera
Performance |
| Timeline |
| Locafy |
| Opera |
Locafy and Opera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locafy and Opera
The main advantage of trading using opposite Locafy and Opera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locafy position performs unexpectedly, Opera 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 Opera will offset losses from the drop in Opera's long position.| Locafy vs. Locafy Limited | Locafy vs. Metalpha Technology Holding | Locafy vs. TuanChe ADR | Locafy vs. Thryv Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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