Correlation Between Allient and OS Therapies
Can any of the company-specific risk be diversified away by investing in both Allient and OS Therapies 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 Allient and OS Therapies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and OS Therapies Incorporated, you can compare the effects of market volatilities on Allient and OS Therapies 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 Allient with a short position of OS Therapies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and OS Therapies.
Diversification Opportunities for Allient and OS Therapies
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allient and OSTX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Allient and OS Therapies Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OS Therapies and Allient 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 Allient are associated (or correlated) with OS Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OS Therapies has no effect on the direction of Allient i.e., Allient and OS Therapies go up and down completely randomly.
Pair Corralation between Allient and OS Therapies
Given the investment horizon of 90 days Allient is expected to generate 1.02 times less return on investment than OS Therapies. But when comparing it to its historical volatility, Allient is 3.65 times less risky than OS Therapies. It trades about 0.16 of its potential returns per unit of risk. OS Therapies Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 409.00 in OS Therapies Incorporated on October 19, 2024 and sell it today you would earn a total of 3.00 from holding OS Therapies Incorporated or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. OS Therapies Incorporated
Performance |
| Timeline |
| Allient |
| OS Therapies |
Allient and OS Therapies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and OS Therapies
The main advantage of trading using opposite Allient and OS Therapies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, OS Therapies 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 OS Therapies will offset losses from the drop in OS Therapies' long position.| Allient vs. Scandinavian Tobacco Group | Allient vs. Aris Water Solutions | Allient vs. Diageo PLC ADR | Allient vs. Ispire Technology Common |
| OS Therapies vs. Allient | OS Therapies vs. Space Communication | OS Therapies vs. Arrow Electronics | OS Therapies vs. KVH Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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