Correlation Between Fortress Biotech and Opthea
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Opthea 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 Fortress Biotech and Opthea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech and Opthea, you can compare the effects of market volatilities on Fortress Biotech and Opthea 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 Fortress Biotech with a short position of Opthea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Opthea.
Diversification Opportunities for Fortress Biotech and Opthea
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortress and Opthea is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea and Fortress Biotech 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 Fortress Biotech are associated (or correlated) with Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Opthea go up and down completely randomly.
Pair Corralation between Fortress Biotech and Opthea
Given the investment horizon of 90 days Fortress Biotech is expected to under-perform the Opthea. But the stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech is 1.0 times less risky than Opthea. The stock trades about -0.08 of its potential returns per unit of risk. The Opthea is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Opthea on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Opthea or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Biotech vs. Opthea
Performance |
| Timeline |
| Fortress Biotech |
| Opthea |
Fortress Biotech and Opthea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and Opthea
The main advantage of trading using opposite Fortress Biotech and Opthea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Opthea 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 Opthea will offset losses from the drop in Opthea's long position.| Fortress Biotech vs. Eliem Therapeutics | Fortress Biotech vs. HCW Biologics | Fortress Biotech vs. RenovoRx | Fortress Biotech vs. Tempest Therapeutics |
| Opthea vs. Molecular Partners AG | Opthea vs. MediciNova | Opthea vs. Anebulo Pharmaceuticals | Opthea vs. Champions Oncology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |