Correlation Between OBI Pharma and Tait Marketing
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and Tait Marketing 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 Tait Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and Tait Marketing Distribution, you can compare the effects of market volatilities on OBI Pharma and Tait Marketing 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 Tait Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and Tait Marketing.
Diversification Opportunities for OBI Pharma and Tait Marketing
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OBI and Tait is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and Tait Marketing Distribution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tait Marketing Distr 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 Tait Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tait Marketing Distr has no effect on the direction of OBI Pharma i.e., OBI Pharma and Tait Marketing go up and down completely randomly.
Pair Corralation between OBI Pharma and Tait Marketing
Assuming the 90 days trading horizon OBI Pharma is expected to under-perform the Tait Marketing. In addition to that, OBI Pharma is 1.39 times more volatile than Tait Marketing Distribution. It trades about -0.04 of its total potential returns per unit of risk. Tait Marketing Distribution is currently generating about 0.02 per unit of volatility. If you would invest 3,785 in Tait Marketing Distribution on September 4, 2024 and sell it today you would earn a total of 175.00 from holding Tait Marketing Distribution or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
OBI Pharma vs. Tait Marketing Distribution
Performance |
| Timeline |
| OBI Pharma |
| Tait Marketing Distr |
OBI Pharma and Tait Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and Tait Marketing
The main advantage of trading using opposite OBI Pharma and Tait Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, Tait Marketing 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 Tait Marketing will offset losses from the drop in Tait Marketing's long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| Tait Marketing vs. YuantaP shares Taiwan Electronics | Tait Marketing vs. YuantaP shares Taiwan Top | Tait Marketing vs. YuantaP shares Taiwan Mid Cap | Tait Marketing vs. Fubon MSCI Taiwan |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |