Correlation Between CSL and Opthea
Can any of the company-specific risk be diversified away by investing in both CSL and Opthea 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 Opthea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Opthea, you can compare the effects of market volatilities on CSL and Opthea 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 Opthea. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Opthea.
Diversification Opportunities for CSL and Opthea
Very good diversification
The 3 months correlation between CSL and Opthea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea 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 are associated (or correlated) with Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of CSL i.e., CSL and Opthea go up and down completely randomly.
Pair Corralation between CSL and Opthea
Assuming the 90 days horizon CSL is expected to generate 0.24 times more return on investment than Opthea. However, CSL is 4.19 times less risky than Opthea. It trades about -0.01 of its potential returns per unit of risk. Opthea is currently generating about -0.01 per unit of risk. If you would invest 9,950 in CSL on September 3, 2024 and sell it today you would lose (762.00) from holding CSL or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL vs. Opthea
Performance |
| Timeline |
| CSL |
| Opthea |
CSL and Opthea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Opthea
The main advantage of trading using opposite CSL and Opthea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, Opthea 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 Opthea will offset losses from the drop in Opthea's long position.The idea behind CSL and Opthea 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.| Opthea vs. Here Media | Opthea vs. Playtika Holding Corp | Opthea vs. Playtech plc | Opthea vs. Modine Manufacturing |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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