Correlation Between Optima Health and Mobius Investment
Can any of the company-specific risk be diversified away by investing in both Optima Health and Mobius Investment 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 Mobius Investment 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 Mobius Investment Trust, you can compare the effects of market volatilities on Optima Health and Mobius Investment 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 Mobius Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Mobius Investment.
Diversification Opportunities for Optima Health and Mobius Investment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Optima and Mobius is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Mobius Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobius Investment Trust 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 Mobius Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobius Investment Trust has no effect on the direction of Optima Health i.e., Optima Health and Mobius Investment go up and down completely randomly.
Pair Corralation between Optima Health and Mobius Investment
Assuming the 90 days trading horizon Optima Health plc is expected to generate 1.25 times more return on investment than Mobius Investment. However, Optima Health is 1.25 times more volatile than Mobius Investment Trust. It trades about 0.12 of its potential returns per unit of risk. Mobius Investment Trust is currently generating about 0.01 per unit of risk. If you would invest 15,100 in Optima Health plc on December 11, 2024 and sell it today you would earn a total of 3,100 from holding Optima Health plc or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 23.29% |
| Values | Daily Returns |
Optima Health plc vs. Mobius Investment Trust
Performance |
| Timeline |
| Optima Health plc |
| Mobius Investment Trust |
Optima Health and Mobius Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Mobius Investment
The main advantage of trading using opposite Optima Health and Mobius Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Mobius Investment 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 Mobius Investment will offset losses from the drop in Mobius Investment's long position.| Optima Health vs. Blackrock World Mining | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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