Correlation Between Apple and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and OPKO HEALTH, you can compare the effects of market volatilities on Apple 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 Apple with a short position of OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and OPKO HEALTH.
Diversification Opportunities for Apple and OPKO HEALTH
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and OPKO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH and Apple 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 Apple Inc 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 Apple i.e., Apple and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Apple and OPKO HEALTH
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.93 times more return on investment than OPKO HEALTH. However, Apple Inc is 1.08 times less risky than OPKO HEALTH. It trades about -0.01 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.27 per unit of risk. If you would invest 23,530 in Apple Inc on October 11, 2024 and sell it today you would lose (45.00) from holding Apple Inc or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. OPKO HEALTH
Performance |
| Timeline |
| Apple Inc |
| OPKO HEALTH |
Apple and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and OPKO HEALTH
The main advantage of trading using opposite Apple and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Khiron Life Sciences | Apple vs. PT Wintermar Offshore | Apple vs. SIEM OFFSHORE NEW | Apple vs. AEON METALS LTD |
| OPKO HEALTH vs. DEVRY EDUCATION GRP | OPKO HEALTH vs. STRAYER EDUCATION | OPKO HEALTH vs. Take Two Interactive Software | OPKO HEALTH vs. FORMPIPE SOFTWARE AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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