Correlation Between CSL and Omeros
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Omeros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL LTD SPONADR and Omeros, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Omeros.
Diversification Opportunities for CSL and Omeros
Very good diversification
The 3 months correlation between CSL and Omeros is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CSL LTD SPONADR and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and CSL 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 CSL LTD SPONADR 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 CSL i.e., CSL and Omeros go up and down completely randomly.
Pair Corralation between CSL and Omeros
Assuming the 90 days trading horizon CSL is expected to generate 92.23 times less return on investment than Omeros. But when comparing it to its historical volatility, CSL LTD SPONADR is 4.45 times less risky than Omeros. It trades about 0.0 of its potential returns per unit of risk. Omeros is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 454.00 in Omeros on August 31, 2024 and sell it today you would earn a total of 661.00 from holding Omeros or generate 145.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
CSL LTD SPONADR vs. Omeros
Performance |
| Timeline |
| CSL LTD SPONADR |
| Omeros |
CSL and Omeros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Omeros
The main advantage of trading using opposite CSL and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.The idea behind CSL LTD SPONADR and Omeros pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Omeros vs. VIRGIN WINES UK | Omeros vs. MI Homes | Omeros vs. CENTURIA OFFICE REIT | Omeros vs. Addus HomeCare |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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