Correlation Between Durect and OptiNose
Can any of the company-specific risk be diversified away by investing in both Durect and OptiNose 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 Durect and OptiNose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and OptiNose, you can compare the effects of market volatilities on Durect and OptiNose 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 Durect with a short position of OptiNose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and OptiNose.
Diversification Opportunities for Durect and OptiNose
Very poor diversification
The 3 months correlation between Durect and OptiNose is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Durect and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Durect 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 Durect are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Durect i.e., Durect and OptiNose go up and down completely randomly.
Pair Corralation between Durect and OptiNose
Given the investment horizon of 90 days Durect is expected to under-perform the OptiNose. But the stock apears to be less risky and, when comparing its historical volatility, Durect is 1.48 times less risky than OptiNose. The stock trades about -0.27 of its potential returns per unit of risk. The OptiNose is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 78.00 in OptiNose on August 28, 2024 and sell it today you would lose (25.00) from holding OptiNose or give up 32.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. OptiNose
Performance |
| Timeline |
| Durect |
| OptiNose |
Durect and OptiNose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and OptiNose
The main advantage of trading using opposite Durect and OptiNose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect position performs unexpectedly, OptiNose 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 OptiNose will offset losses from the drop in OptiNose's long position.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| OptiNose vs. Collegium Pharmaceutical | OptiNose vs. Phibro Animal Health | OptiNose vs. ANI Pharmaceuticals | OptiNose vs. Procaps Group SA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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