Correlation Between HOYA and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both HOYA 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 HOYA and OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOYA Corporation and OPKO HEALTH, you can compare the effects of market volatilities on HOYA 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 HOYA with a short position of OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA and OPKO HEALTH.
Diversification Opportunities for HOYA and OPKO HEALTH
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HOYA and OPKO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Corp. and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH and HOYA 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 HOYA Corporation 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 HOYA i.e., HOYA and OPKO HEALTH go up and down completely randomly.
Pair Corralation between HOYA and OPKO HEALTH
Assuming the 90 days horizon HOYA Corporation is expected to generate 2.67 times more return on investment than OPKO HEALTH. However, HOYA is 2.67 times more volatile than OPKO HEALTH. It trades about 0.21 of its potential returns per unit of risk. OPKO HEALTH is currently generating about 0.06 per unit of risk. If you would invest 12,060 in HOYA Corporation on November 4, 2024 and sell it today you would earn a total of 880.00 from holding HOYA Corporation or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOYA Corp. vs. OPKO HEALTH
Performance |
| Timeline |
| HOYA |
| OPKO HEALTH |
HOYA and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOYA and OPKO HEALTH
The main advantage of trading using opposite HOYA and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA 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.| HOYA vs. DISTRICT METALS | HOYA vs. Jacquet Metal Service | HOYA vs. Eurasia Mining Plc | HOYA vs. East Africa Metals |
| OPKO HEALTH vs. BW OFFSHORE LTD | OPKO HEALTH vs. Osisko Metals | OPKO HEALTH vs. East Africa Metals | OPKO HEALTH vs. Hua Hong Semiconductor |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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