Correlation Between Electreon Wireless and Opko Health

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Can any of the company-specific risk be diversified away by investing in both Electreon Wireless and Opko 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 Electreon Wireless and Opko Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electreon Wireless and Opko Health, you can compare the effects of market volatilities on Electreon Wireless and Opko 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 Electreon Wireless with a short position of Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electreon Wireless and Opko Health.

Diversification Opportunities for Electreon Wireless and Opko Health

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Electreon and Opko is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Electreon Wireless and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health and Electreon Wireless 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 Electreon Wireless are associated (or correlated) with Opko Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opko Health has no effect on the direction of Electreon Wireless i.e., Electreon Wireless and Opko Health go up and down completely randomly.

Pair Corralation between Electreon Wireless and Opko Health

Assuming the 90 days trading horizon Electreon Wireless is expected to under-perform the Opko Health. In addition to that, Electreon Wireless is 1.23 times more volatile than Opko Health. It trades about -0.06 of its total potential returns per unit of risk. Opko Health is currently generating about 0.29 per unit of volatility. If you would invest  54,700  in Opko Health on November 29, 2024 and sell it today you would earn a total of  5,120  from holding Opko Health or generate 9.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Electreon Wireless  vs.  Opko Health

 Performance 
       Timeline  
Electreon Wireless 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Electreon Wireless are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Electreon Wireless may actually be approaching a critical reversion point that can send shares even higher in March 2025.
Opko Health 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Opko Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Opko Health may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Electreon Wireless and Opko Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Electreon Wireless and Opko Health

The main advantage of trading using opposite Electreon Wireless and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electreon Wireless position performs unexpectedly, Opko 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 Opko Health will offset losses from the drop in Opko Health's long position.
The idea behind Electreon Wireless and Opko Health 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.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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