Correlation Between Opko Health and Scope Metals
Can any of the company-specific risk be diversified away by investing in both Opko Health and Scope Metals 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 Opko Health and Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Scope Metals Group, you can compare the effects of market volatilities on Opko Health and Scope Metals 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 Opko Health with a short position of Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Scope Metals.
Diversification Opportunities for Opko Health and Scope Metals
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Opko and Scope is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group and Opko Health 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 Opko Health are associated (or correlated) with Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Opko Health i.e., Opko Health and Scope Metals go up and down completely randomly.
Pair Corralation between Opko Health and Scope Metals
Assuming the 90 days trading horizon Opko Health is expected to under-perform the Scope Metals. In addition to that, Opko Health is 1.66 times more volatile than Scope Metals Group. It trades about -0.03 of its total potential returns per unit of risk. Scope Metals Group is currently generating about 0.33 per unit of volatility. If you would invest 1,172,000 in Scope Metals Group on August 31, 2024 and sell it today you would earn a total of 205,000 from holding Scope Metals Group or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opko Health vs. Scope Metals Group
Performance |
| Timeline |
| Opko Health |
| Scope Metals Group |
Opko Health and Scope Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opko Health and Scope Metals
The main advantage of trading using opposite Opko Health and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
| Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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