Correlation Between OBI Pharma and Launch Technologies
Can any of the company-specific risk be diversified away by investing in both OBI Pharma and Launch Technologies 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 Launch Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OBI Pharma and Launch Technologies Co, you can compare the effects of market volatilities on OBI Pharma and Launch Technologies 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 Launch Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OBI Pharma and Launch Technologies.
Diversification Opportunities for OBI Pharma and Launch Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OBI and Launch is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding OBI Pharma and Launch Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch Technologies 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 Launch Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch Technologies has no effect on the direction of OBI Pharma i.e., OBI Pharma and Launch Technologies go up and down completely randomly.
Pair Corralation between OBI Pharma and Launch Technologies
Assuming the 90 days trading horizon OBI Pharma is expected to generate 0.98 times more return on investment than Launch Technologies. However, OBI Pharma is 1.02 times less risky than Launch Technologies. It trades about -0.01 of its potential returns per unit of risk. Launch Technologies Co is currently generating about -0.05 per unit of risk. If you would invest 7,480 in OBI Pharma on August 30, 2024 and sell it today you would lose (1,270) from holding OBI Pharma or give up 16.98% 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. Launch Technologies Co
Performance |
| Timeline |
| OBI Pharma |
| Launch Technologies |
OBI Pharma and Launch Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OBI Pharma and Launch Technologies
The main advantage of trading using opposite OBI Pharma and Launch Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OBI Pharma position performs unexpectedly, Launch Technologies 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 Launch Technologies will offset losses from the drop in Launch Technologies' long position.| OBI Pharma vs. TaiMed Biologics | OBI Pharma vs. PharmaEngine | OBI Pharma vs. Medigen Biotechnology | OBI Pharma vs. TTY Biopharm Co |
| Launch Technologies vs. Univacco Technology | Launch Technologies vs. Integrated Service Technology | Launch Technologies vs. Microtips Technology | Launch Technologies vs. Arbor Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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