Correlation Between OBI Pharma and Sun Race
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and Sun Race 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 OBI Pharma and Sun Race into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and Sun Race Sturmey Archer, you can compare the effects of market volatilities on OBI Pharma and Sun Race 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 OBI Pharma with a short position of Sun Race. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and Sun Race.
Diversification Opportunities for OBI Pharma and Sun Race
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OBI and Sun is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and Sun Race Sturmey Archer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Race Sturmey and OBI Pharma 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 OBI Pharma are associated (or correlated) with Sun Race. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Race Sturmey has no effect on the direction of OBI Pharma i.e., OBI Pharma and Sun Race go up and down completely randomly.
Pair Corralation between OBI Pharma and Sun Race
Assuming the 90 days trading horizon OBI Pharma is expected to generate 0.82 times more return on investment than Sun Race. However, OBI Pharma is 1.22 times less risky than Sun Race. It trades about -0.17 of its potential returns per unit of risk. Sun Race Sturmey Archer is currently generating about -0.39 per unit of risk. If you would invest 6,520 in OBI Pharma on August 30, 2024 and sell it today you would lose (310.00) from holding OBI Pharma or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OBI Pharma vs. Sun Race Sturmey Archer
Performance |
| Timeline |
| OBI Pharma |
| Sun Race Sturmey |
OBI Pharma and Sun Race Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and Sun Race
The main advantage of trading using opposite OBI Pharma and Sun Race positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, Sun Race 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 Sun Race will offset losses from the drop in Sun Race's long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| Sun Race vs. Lee Chi Enterprises | Sun Race vs. Basso Industry Corp | Sun Race vs. Giant Manufacturing Co | Sun Race vs. Merida Industry Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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