Correlation Between Optima Health and Andrews Sykes
Can any of the company-specific risk be diversified away by investing in both Optima Health and Andrews Sykes 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 Optima Health and Andrews Sykes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Andrews Sykes Group, you can compare the effects of market volatilities on Optima Health and Andrews Sykes 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 Optima Health with a short position of Andrews Sykes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Andrews Sykes.
Diversification Opportunities for Optima Health and Andrews Sykes
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Optima and Andrews is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Andrews Sykes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrews Sykes Group and Optima 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 Optima Health plc are associated (or correlated) with Andrews Sykes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrews Sykes Group has no effect on the direction of Optima Health i.e., Optima Health and Andrews Sykes go up and down completely randomly.
Pair Corralation between Optima Health and Andrews Sykes
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Andrews Sykes. But the stock apears to be less risky and, when comparing its historical volatility, Optima Health plc is 1.25 times less risky than Andrews Sykes. The stock trades about -0.35 of its potential returns per unit of risk. The Andrews Sykes Group is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 52,000 in Andrews Sykes Group on September 15, 2024 and sell it today you would lose (1,850) from holding Andrews Sykes Group or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Andrews Sykes Group
Performance |
| Timeline |
| Optima Health plc |
| Andrews Sykes Group |
Optima Health and Andrews Sykes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Andrews Sykes
The main advantage of trading using opposite Optima Health and Andrews Sykes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Andrews Sykes 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 Andrews Sykes will offset losses from the drop in Andrews Sykes' long position.| Optima Health vs. Toyota Motor Corp | Optima Health vs. SoftBank Group Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Hershey Co |
| Andrews Sykes vs. Omega Healthcare Investors | Andrews Sykes vs. Optima Health plc | Andrews Sykes vs. HCA Healthcare | Andrews Sykes vs. Universal Display Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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