Correlation Between UNIPHAR PLC and Option Care
Can any of the company-specific risk be diversified away by investing in both UNIPHAR PLC and Option Care 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 UNIPHAR PLC and Option Care into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIPHAR PLC EO and Option Care Health, you can compare the effects of market volatilities on UNIPHAR PLC and Option Care 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 UNIPHAR PLC with a short position of Option Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIPHAR PLC and Option Care.
Diversification Opportunities for UNIPHAR PLC and Option Care
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UNIPHAR and Option is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UNIPHAR PLC EO and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health and UNIPHAR PLC 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 UNIPHAR PLC EO are associated (or correlated) with Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of UNIPHAR PLC i.e., UNIPHAR PLC and Option Care go up and down completely randomly.
Pair Corralation between UNIPHAR PLC and Option Care
Assuming the 90 days horizon UNIPHAR PLC EO is expected to under-perform the Option Care. But the stock apears to be less risky and, when comparing its historical volatility, UNIPHAR PLC EO is 1.41 times less risky than Option Care. The stock trades about 0.0 of its potential returns per unit of risk. The Option Care Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,120 in Option Care Health on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Option Care Health or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIPHAR PLC EO vs. Option Care Health
Performance |
| Timeline |
| UNIPHAR PLC EO |
| Option Care Health |
UNIPHAR PLC and Option Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIPHAR PLC and Option Care
The main advantage of trading using opposite UNIPHAR PLC and Option Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIPHAR PLC position performs unexpectedly, Option Care 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 Option Care will offset losses from the drop in Option Care's long position.| UNIPHAR PLC vs. JD HEALTH INTL | UNIPHAR PLC vs. Fresenius SE Co | UNIPHAR PLC vs. Fresenius Medical Care | UNIPHAR PLC vs. Sonic Healthcare Limited |
| Option Care vs. SPORTING | Option Care vs. NTG Nordic Transport | Option Care vs. Chuangs China Investments | Option Care vs. SCIENCE IN SPORT |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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