Correlation Between Arad Investment and Opko Health
Can any of the company-specific risk be diversified away by investing in both Arad Investment 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 Arad Investment and Opko Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arad Investment Industrial and Opko Health, you can compare the effects of market volatilities on Arad Investment 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 Arad Investment with a short position of Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arad Investment and Opko Health.
Diversification Opportunities for Arad Investment and Opko Health
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arad and Opko is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Arad Investment Industrial and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health and Arad Investment 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 Arad Investment Industrial 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 Arad Investment i.e., Arad Investment and Opko Health go up and down completely randomly.
Pair Corralation between Arad Investment and Opko Health
Assuming the 90 days trading horizon Arad Investment Industrial is expected to generate 0.82 times more return on investment than Opko Health. However, Arad Investment Industrial is 1.22 times less risky than Opko Health. It trades about 0.18 of its potential returns per unit of risk. Opko Health is currently generating about 0.09 per unit of risk. If you would invest 730,800 in Arad Investment Industrial on November 3, 2024 and sell it today you would earn a total of 1,009,200 from holding Arad Investment Industrial or generate 138.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arad Investment Industrial vs. Opko Health
Performance |
| Timeline |
| Arad Investment Indu |
| Opko Health |
Arad Investment and Opko Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arad Investment and Opko Health
The main advantage of trading using opposite Arad Investment and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arad Investment 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.| Arad Investment vs. Arad | Arad Investment vs. Alony Hetz Properties | Arad Investment vs. Danel | Arad Investment vs. Airport City |
| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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