Correlation Between DG Innovate and OptiBiotix Health
Can any of the company-specific risk be diversified away by investing in both DG Innovate and OptiBiotix 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 DG Innovate and OptiBiotix Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DG Innovate PLC and OptiBiotix Health Plc, you can compare the effects of market volatilities on DG Innovate and OptiBiotix 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 DG Innovate with a short position of OptiBiotix Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of DG Innovate and OptiBiotix Health.
Diversification Opportunities for DG Innovate and OptiBiotix Health
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DGI and OptiBiotix is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DG Innovate PLC and OptiBiotix Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiBiotix Health Plc and DG Innovate 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 DG Innovate PLC are associated (or correlated) with OptiBiotix Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiBiotix Health Plc has no effect on the direction of DG Innovate i.e., DG Innovate and OptiBiotix Health go up and down completely randomly.
Pair Corralation between DG Innovate and OptiBiotix Health
Assuming the 90 days trading horizon DG Innovate PLC is expected to generate 1.51 times more return on investment than OptiBiotix Health. However, DG Innovate is 1.51 times more volatile than OptiBiotix Health Plc. It trades about 0.38 of its potential returns per unit of risk. OptiBiotix Health Plc is currently generating about 0.21 per unit of risk. If you would invest 6.30 in DG Innovate PLC on August 30, 2024 and sell it today you would earn a total of 4.70 from holding DG Innovate PLC or generate 74.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DG Innovate PLC vs. OptiBiotix Health Plc
Performance |
| Timeline |
| DG Innovate PLC |
| OptiBiotix Health Plc |
DG Innovate and OptiBiotix Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DG Innovate and OptiBiotix Health
The main advantage of trading using opposite DG Innovate and OptiBiotix Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DG Innovate position performs unexpectedly, OptiBiotix 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 OptiBiotix Health will offset losses from the drop in OptiBiotix Health's long position.| DG Innovate vs. AIM ImmunoTech | DG Innovate vs. Silvercorp Metals | DG Innovate vs. L3Harris Technologies | DG Innovate vs. Ashtead Technology Holdings |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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