Correlation Between ONEOK and Optima Health
Can any of the company-specific risk be diversified away by investing in both ONEOK and Optima Health 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 ONEOK and Optima Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Optima Health plc, you can compare the effects of market volatilities on ONEOK and Optima Health 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 ONEOK with a short position of Optima Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Optima Health.
Diversification Opportunities for ONEOK and Optima Health
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ONEOK and Optima is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Optima Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Health plc and ONEOK 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 ONEOK Inc are associated (or correlated) with Optima Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Health plc has no effect on the direction of ONEOK i.e., ONEOK and Optima Health go up and down completely randomly.
Pair Corralation between ONEOK and Optima Health
Assuming the 90 days trading horizon ONEOK Inc is expected to generate 1.31 times more return on investment than Optima Health. However, ONEOK is 1.31 times more volatile than Optima Health plc. It trades about -0.14 of its potential returns per unit of risk. Optima Health plc is currently generating about -0.56 per unit of risk. If you would invest 10,596 in ONEOK Inc on October 11, 2024 and sell it today you would lose (384.00) from holding ONEOK Inc or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ONEOK Inc vs. Optima Health plc
Performance |
| Timeline |
| ONEOK Inc |
| Optima Health plc |
ONEOK and Optima Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Optima Health
The main advantage of trading using opposite ONEOK and Optima Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Optima Health 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 Optima Health will offset losses from the drop in Optima Health's long position.| ONEOK vs. MTI Wireless Edge | ONEOK vs. Veolia Environnement VE | ONEOK vs. Dentsply Sirona | ONEOK vs. Infrastrutture Wireless Italiane |
| Optima Health vs. Toyota Motor Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Newmont Corp | Optima Health vs. ONEOK Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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