Correlation Between OBI Pharma and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and GlobalWafers 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 GlobalWafers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and GlobalWafers Co, you can compare the effects of market volatilities on OBI Pharma and GlobalWafers 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 GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and GlobalWafers.
Diversification Opportunities for OBI Pharma and GlobalWafers
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between OBI and GlobalWafers is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers 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 GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of OBI Pharma i.e., OBI Pharma and GlobalWafers go up and down completely randomly.
Pair Corralation between OBI Pharma and GlobalWafers
Assuming the 90 days trading horizon OBI Pharma is expected to under-perform the GlobalWafers. But the stock apears to be less risky and, when comparing its historical volatility, OBI Pharma is 1.61 times less risky than GlobalWafers. The stock trades about -0.18 of its potential returns per unit of risk. The GlobalWafers Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 43,000 in GlobalWafers Co on August 26, 2024 and sell it today you would lose (900.00) from holding GlobalWafers Co or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OBI Pharma vs. GlobalWafers Co
Performance |
| Timeline |
| OBI Pharma |
| GlobalWafers |
OBI Pharma and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and GlobalWafers
The main advantage of trading using opposite OBI Pharma and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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