Correlation Between Optima Health and Synthomer Plc
Can any of the company-specific risk be diversified away by investing in both Optima Health and Synthomer Plc 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 Synthomer Plc 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 Synthomer plc, you can compare the effects of market volatilities on Optima Health and Synthomer Plc 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 Synthomer Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Synthomer Plc.
Diversification Opportunities for Optima Health and Synthomer Plc
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Synthomer is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Synthomer plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synthomer plc 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 Synthomer Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synthomer plc has no effect on the direction of Optima Health i.e., Optima Health and Synthomer Plc go up and down completely randomly.
Pair Corralation between Optima Health and Synthomer Plc
Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.45 times more return on investment than Synthomer Plc. However, Optima Health plc is 2.23 times less risky than Synthomer Plc. It trades about 0.05 of its potential returns per unit of risk. Synthomer plc is currently generating about -0.14 per unit of risk. If you would invest 15,100 in Optima Health plc on September 1, 2024 and sell it today you would earn a total of 450.00 from holding Optima Health plc or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 36.43% |
| Values | Daily Returns |
Optima Health plc vs. Synthomer plc
Performance |
| Timeline |
| Optima Health plc |
| Synthomer plc |
Optima Health and Synthomer Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Synthomer Plc
The main advantage of trading using opposite Optima Health and Synthomer Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Synthomer Plc 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 Synthomer Plc will offset losses from the drop in Synthomer Plc's long position.| Optima Health vs. Trainline Plc | Optima Health vs. Allianz Technology Trust | Optima Health vs. Sabien Technology Group | Optima Health vs. Gaztransport et Technigaz |
| Synthomer Plc vs. Givaudan SA | Synthomer Plc vs. Antofagasta PLC | Synthomer Plc vs. Centamin PLC | Synthomer Plc vs. Atalaya Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |