Correlation Between Opko Health and Terminal X
Can any of the company-specific risk be diversified away by investing in both Opko Health and Terminal X 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 Terminal X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Terminal X Online, you can compare the effects of market volatilities on Opko Health and Terminal X 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 Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Terminal X.
Diversification Opportunities for Opko Health and Terminal X
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Opko and Terminal is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online 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 Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Opko Health i.e., Opko Health and Terminal X go up and down completely randomly.
Pair Corralation between Opko Health and Terminal X
Assuming the 90 days trading horizon Opko Health is expected to generate 3.54 times less return on investment than Terminal X. In addition to that, Opko Health is 2.9 times more volatile than Terminal X Online. It trades about 0.05 of its total potential returns per unit of risk. Terminal X Online is currently generating about 0.48 per unit of volatility. If you would invest 37,900 in Terminal X Online on August 29, 2024 and sell it today you would earn a total of 6,040 from holding Terminal X Online or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Opko Health vs. Terminal X Online
Performance |
| Timeline |
| Opko Health |
| Terminal X Online |
Opko Health and Terminal X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opko Health and Terminal X
The main advantage of trading using opposite Opko Health and Terminal X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, Terminal X 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 Terminal X will offset losses from the drop in Terminal X's long position.| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
| Terminal X vs. Fox Wizel | Terminal X vs. Retailors | Terminal X vs. Delek Group | Terminal X vs. Holmes Place International |
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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