Correlation Between ALGOMA STEEL and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and OPKO HEALTH 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 ALGOMA STEEL and OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALGOMA STEEL GROUP and OPKO HEALTH, you can compare the effects of market volatilities on ALGOMA STEEL and OPKO HEALTH 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 ALGOMA STEEL with a short position of OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and OPKO HEALTH.
Diversification Opportunities for ALGOMA STEEL and OPKO HEALTH
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ALGOMA and OPKO is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH and ALGOMA STEEL 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 ALGOMA STEEL GROUP are associated (or correlated) with OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and OPKO HEALTH go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and OPKO HEALTH
Assuming the 90 days horizon ALGOMA STEEL is expected to generate 7.88 times less return on investment than OPKO HEALTH. In addition to that, ALGOMA STEEL is 1.12 times more volatile than OPKO HEALTH. It trades about 0.01 of its total potential returns per unit of risk. OPKO HEALTH is currently generating about 0.1 per unit of volatility. If you would invest 91.00 in OPKO HEALTH on October 16, 2024 and sell it today you would earn a total of 55.00 from holding OPKO HEALTH or generate 60.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. OPKO HEALTH
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| OPKO HEALTH |
ALGOMA STEEL and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and OPKO HEALTH
The main advantage of trading using opposite ALGOMA STEEL and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| ALGOMA STEEL vs. USWE SPORTS AB | ALGOMA STEEL vs. Playmates Toys Limited | ALGOMA STEEL vs. InPlay Oil Corp | ALGOMA STEEL vs. T MOBILE INCDL 00001 |
| OPKO HEALTH vs. Singapore Reinsurance | OPKO HEALTH vs. Universal Insurance Holdings | OPKO HEALTH vs. CHINA TONTINE WINES | OPKO HEALTH vs. American Eagle Outfitters |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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