Correlation Between Faron Pharmaceuticals and ONEOK
Can any of the company-specific risk be diversified away by investing in both Faron Pharmaceuticals and ONEOK 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 Faron Pharmaceuticals and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faron Pharmaceuticals Oy and ONEOK Inc, you can compare the effects of market volatilities on Faron Pharmaceuticals and ONEOK 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 Faron Pharmaceuticals with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faron Pharmaceuticals and ONEOK.
Diversification Opportunities for Faron Pharmaceuticals and ONEOK
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Faron and ONEOK is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Faron Pharmaceuticals Oy and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Faron Pharmaceuticals 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 Faron Pharmaceuticals Oy are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Faron Pharmaceuticals i.e., Faron Pharmaceuticals and ONEOK go up and down completely randomly.
Pair Corralation between Faron Pharmaceuticals and ONEOK
Assuming the 90 days trading horizon Faron Pharmaceuticals Oy is expected to generate 4.07 times more return on investment than ONEOK. However, Faron Pharmaceuticals is 4.07 times more volatile than ONEOK Inc. It trades about 0.2 of its potential returns per unit of risk. ONEOK Inc is currently generating about -0.1 per unit of risk. If you would invest 17,000 in Faron Pharmaceuticals Oy on October 14, 2024 and sell it today you would earn a total of 3,000 from holding Faron Pharmaceuticals Oy or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Faron Pharmaceuticals Oy vs. ONEOK Inc
Performance |
| Timeline |
| Faron Pharmaceuticals |
| ONEOK Inc |
Faron Pharmaceuticals and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faron Pharmaceuticals and ONEOK
The main advantage of trading using opposite Faron Pharmaceuticals and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faron Pharmaceuticals position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| Faron Pharmaceuticals vs. Omega Healthcare Investors | Faron Pharmaceuticals vs. Invesco Physical Silver | Faron Pharmaceuticals vs. Cardinal Health | Faron Pharmaceuticals vs. Anglo Asian Mining |
| ONEOK vs. Finnair Oyj | ONEOK vs. Ubisoft Entertainment | ONEOK vs. AcadeMedia AB | ONEOK vs. Qurate Retail Series |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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