Correlation Between Optima Health and Oxford Technology
Can any of the company-specific risk be diversified away by investing in both Optima Health and Oxford Technology 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 Oxford Technology 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 Oxford Technology 2, you can compare the effects of market volatilities on Optima Health and Oxford Technology 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 Oxford Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Oxford Technology.
Diversification Opportunities for Optima Health and Oxford Technology
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Optima and Oxford is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Oxford Technology 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Technology 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 Oxford Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Technology has no effect on the direction of Optima Health i.e., Optima Health and Oxford Technology go up and down completely randomly.
Pair Corralation between Optima Health and Oxford Technology
Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.6 times more return on investment than Oxford Technology. However, Optima Health plc is 1.68 times less risky than Oxford Technology. It trades about -0.07 of its potential returns per unit of risk. Oxford Technology 2 is currently generating about -0.12 per unit of risk. If you would invest 15,100 in Optima Health plc on October 16, 2024 and sell it today you would lose (1,050) from holding Optima Health plc or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 15.09% |
| Values | Daily Returns |
Optima Health plc vs. Oxford Technology 2
Performance |
| Timeline |
| Optima Health plc |
| Oxford Technology |
Optima Health and Oxford Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Oxford Technology
The main advantage of trading using opposite Optima Health and Oxford Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Oxford Technology 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 Oxford Technology will offset losses from the drop in Oxford Technology's long position.| Optima Health vs. Monks Investment Trust | Optima Health vs. Taylor Maritime Investments | Optima Health vs. Gaztransport et Technigaz | Optima Health vs. Kaufman Et Broad |
| Oxford Technology vs. Inspiration Healthcare Group | Oxford Technology vs. Veolia Environnement VE | Oxford Technology vs. Optima Health plc | Oxford Technology vs. United States Steel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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