Correlation Between Evotec SE and OptiNose
Can any of the company-specific risk be diversified away by investing in both Evotec SE 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 Evotec SE and OptiNose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evotec SE ADR and OptiNose, you can compare the effects of market volatilities on Evotec SE 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 Evotec SE with a short position of OptiNose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evotec SE and OptiNose.
Diversification Opportunities for Evotec SE and OptiNose
Excellent diversification
The 3 months correlation between Evotec and OptiNose is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Evotec SE ADR and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Evotec SE 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 Evotec SE ADR 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 Evotec SE i.e., Evotec SE and OptiNose go up and down completely randomly.
Pair Corralation between Evotec SE and OptiNose
Considering the 90-day investment horizon Evotec SE ADR is expected to generate 0.89 times more return on investment than OptiNose. However, Evotec SE ADR is 1.13 times less risky than OptiNose. It trades about 0.17 of its potential returns per unit of risk. OptiNose is currently generating about -0.14 per unit of risk. If you would invest 386.00 in Evotec SE ADR on August 28, 2024 and sell it today you would earn a total of 103.00 from holding Evotec SE ADR or generate 26.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evotec SE ADR vs. OptiNose
Performance |
| Timeline |
| Evotec SE ADR |
| OptiNose |
Evotec SE and OptiNose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evotec SE and OptiNose
The main advantage of trading using opposite Evotec SE and OptiNose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evotec SE 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.| Evotec SE vs. Eliem Therapeutics | Evotec SE vs. HCW Biologics | Evotec SE vs. Scpharmaceuticals | Evotec SE vs. Milestone 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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