Correlation Between Biogen and Omeros
Can any of the company-specific risk be diversified away by investing in both Biogen and Omeros 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 Biogen and Omeros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Omeros, you can compare the effects of market volatilities on Biogen and Omeros 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 Biogen with a short position of Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Omeros.
Diversification Opportunities for Biogen and Omeros
Excellent diversification
The 3 months correlation between Biogen and Omeros is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and Biogen 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 Biogen Inc are associated (or correlated) with Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of Biogen i.e., Biogen and Omeros go up and down completely randomly.
Pair Corralation between Biogen and Omeros
Given the investment horizon of 90 days Biogen Inc is expected to generate 0.31 times more return on investment than Omeros. However, Biogen Inc is 3.28 times less risky than Omeros. It trades about -0.12 of its potential returns per unit of risk. Omeros is currently generating about -0.1 per unit of risk. If you would invest 15,000 in Biogen Inc on November 3, 2024 and sell it today you would lose (607.00) from holding Biogen Inc or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. Omeros
Performance |
| Timeline |
| Biogen Inc |
| Omeros |
Biogen and Omeros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Omeros
The main advantage of trading using opposite Biogen and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Omeros 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 Omeros will offset losses from the drop in Omeros' long position.| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
| Omeros vs. Crinetics Pharmaceuticals | Omeros vs. Enanta Pharmaceuticals | Omeros vs. Amicus Therapeutics | Omeros vs. Connect Biopharma Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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