Correlation Between Oncopeptides and Diagonal Bio
Can any of the company-specific risk be diversified away by investing in both Oncopeptides and Diagonal Bio 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 Oncopeptides and Diagonal Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncopeptides AB and Diagonal Bio AB, you can compare the effects of market volatilities on Oncopeptides and Diagonal Bio 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 Oncopeptides with a short position of Diagonal Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncopeptides and Diagonal Bio.
Diversification Opportunities for Oncopeptides and Diagonal Bio
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oncopeptides and Diagonal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oncopeptides AB and Diagonal Bio AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diagonal Bio AB and Oncopeptides 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 Oncopeptides AB are associated (or correlated) with Diagonal Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diagonal Bio AB has no effect on the direction of Oncopeptides i.e., Oncopeptides and Diagonal Bio go up and down completely randomly.
Pair Corralation between Oncopeptides and Diagonal Bio
Assuming the 90 days trading horizon Oncopeptides AB is expected to under-perform the Diagonal Bio. But the stock apears to be less risky and, when comparing its historical volatility, Oncopeptides AB is 2.6 times less risky than Diagonal Bio. The stock trades about -0.05 of its potential returns per unit of risk. The Diagonal Bio AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 73.00 in Diagonal Bio AB on September 3, 2024 and sell it today you would lose (69.80) from holding Diagonal Bio AB or give up 95.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oncopeptides AB vs. Diagonal Bio AB
Performance |
| Timeline |
| Oncopeptides AB |
| Diagonal Bio AB |
Oncopeptides and Diagonal Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oncopeptides and Diagonal Bio
The main advantage of trading using opposite Oncopeptides and Diagonal Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncopeptides position performs unexpectedly, Diagonal Bio 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 Diagonal Bio will offset losses from the drop in Diagonal Bio's long position.| Oncopeptides vs. BioInvent International AB | Oncopeptides vs. Alligator Bioscience AB | Oncopeptides vs. Swedish Orphan Biovitrum | Oncopeptides vs. Anoto Group AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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