Correlation Between OBI Pharma and Medigen Biotechnology
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and Medigen Biotechnology 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 Medigen Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and Medigen Biotechnology, you can compare the effects of market volatilities on OBI Pharma and Medigen Biotechnology 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 Medigen Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and Medigen Biotechnology.
Diversification Opportunities for OBI Pharma and Medigen Biotechnology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OBI and Medigen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology 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 Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of OBI Pharma i.e., OBI Pharma and Medigen Biotechnology go up and down completely randomly.
Pair Corralation between OBI Pharma and Medigen Biotechnology
Assuming the 90 days trading horizon OBI Pharma is expected to under-perform the Medigen Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, OBI Pharma is 1.28 times less risky than Medigen Biotechnology. The stock trades about -0.02 of its potential returns per unit of risk. The Medigen Biotechnology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,295 in Medigen Biotechnology on November 27, 2024 and sell it today you would earn a total of 405.00 from holding Medigen Biotechnology or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OBI Pharma vs. Medigen Biotechnology
Performance |
| Timeline |
| OBI Pharma |
| Medigen Biotechnology |
OBI Pharma and Medigen Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and Medigen Biotechnology
The main advantage of trading using opposite OBI Pharma and Medigen Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, Medigen Biotechnology 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 Medigen Biotechnology will offset losses from the drop in Medigen Biotechnology's long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| Medigen Biotechnology vs. Sinphar Pharmaceutical Co | Medigen Biotechnology vs. Abnova Taiwan Corp | Medigen Biotechnology vs. YungShin Global Holding | Medigen Biotechnology vs. Phytohealth Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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