Correlation Between United Orthopedic and Ok Biotech
Can any of the company-specific risk be diversified away by investing in both United Orthopedic and Ok Biotech 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 United Orthopedic and Ok Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Orthopedic and Ok Biotech Co, you can compare the effects of market volatilities on United Orthopedic and Ok Biotech 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 United Orthopedic with a short position of Ok Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Orthopedic and Ok Biotech.
Diversification Opportunities for United Orthopedic and Ok Biotech
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and 4155 is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding United Orthopedic and Ok Biotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ok Biotech and United Orthopedic 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 United Orthopedic are associated (or correlated) with Ok Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ok Biotech has no effect on the direction of United Orthopedic i.e., United Orthopedic and Ok Biotech go up and down completely randomly.
Pair Corralation between United Orthopedic and Ok Biotech
Assuming the 90 days trading horizon United Orthopedic is expected to generate 1.24 times more return on investment than Ok Biotech. However, United Orthopedic is 1.24 times more volatile than Ok Biotech Co. It trades about 0.07 of its potential returns per unit of risk. Ok Biotech Co is currently generating about -0.04 per unit of risk. If you would invest 5,200 in United Orthopedic on November 27, 2024 and sell it today you would earn a total of 4,380 from holding United Orthopedic or generate 84.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.35% |
| Values | Daily Returns |
United Orthopedic vs. Ok Biotech Co
Performance |
| Timeline |
| United Orthopedic |
| Ok Biotech |
United Orthopedic and Ok Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Orthopedic and Ok Biotech
The main advantage of trading using opposite United Orthopedic and Ok Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Orthopedic position performs unexpectedly, Ok Biotech 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 Ok Biotech will offset losses from the drop in Ok Biotech's long position.| United Orthopedic vs. Johnson Chemical Pharmaceutical | United Orthopedic vs. Mercuries Life Insurance | United Orthopedic vs. Yuanta Financial Holdings | United Orthopedic vs. Cathay Financial Holding |
| Ok Biotech vs. Sitronix Technology Corp | Ok Biotech vs. Apacer Technology | Ok Biotech vs. Asmedia Technology | Ok Biotech vs. Grand Ocean Retail |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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