Correlation Between Ever Supreme and OBI Pharma
Can any of the company-specific risk be diversified away by investing in both Ever Supreme and OBI Pharma 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 Ever Supreme and OBI Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Supreme Bio and OBI Pharma, you can compare the effects of market volatilities on Ever Supreme and OBI Pharma 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 Ever Supreme with a short position of OBI Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Supreme and OBI Pharma.
Diversification Opportunities for Ever Supreme and OBI Pharma
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ever and OBI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ever Supreme Bio and OBI Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBI Pharma and Ever Supreme 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 Ever Supreme Bio are associated (or correlated) with OBI Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBI Pharma has no effect on the direction of Ever Supreme i.e., Ever Supreme and OBI Pharma go up and down completely randomly.
Pair Corralation between Ever Supreme and OBI Pharma
Assuming the 90 days trading horizon Ever Supreme Bio is expected to generate 0.53 times more return on investment than OBI Pharma. However, Ever Supreme Bio is 1.88 times less risky than OBI Pharma. It trades about 0.12 of its potential returns per unit of risk. OBI Pharma is currently generating about -0.03 per unit of risk. If you would invest 17,350 in Ever Supreme Bio on October 24, 2024 and sell it today you would earn a total of 400.00 from holding Ever Supreme Bio or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ever Supreme Bio vs. OBI Pharma
Performance |
| Timeline |
| Ever Supreme Bio |
| OBI Pharma |
Ever Supreme and OBI Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Supreme and OBI Pharma
The main advantage of trading using opposite Ever Supreme and OBI Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Supreme position performs unexpectedly, OBI Pharma 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 OBI Pharma will offset losses from the drop in OBI Pharma's long position.| Ever Supreme vs. Hi Lai Foods Co | Ever Supreme vs. RiTdisplay Corp | Ever Supreme vs. Chung Hwa Food | Ever Supreme vs. An Shin Food Services |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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