Correlation Between OptiCept Technologies and Bio Works
Can any of the company-specific risk be diversified away by investing in both OptiCept Technologies and Bio Works 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 OptiCept Technologies and Bio Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OptiCept Technologies AB and Bio Works Technologies AB, you can compare the effects of market volatilities on OptiCept Technologies and Bio Works 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 OptiCept Technologies with a short position of Bio Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of OptiCept Technologies and Bio Works.
Diversification Opportunities for OptiCept Technologies and Bio Works
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OptiCept and Bio is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and Bio Works Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Works Technologies and OptiCept Technologies 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 OptiCept Technologies AB are associated (or correlated) with Bio Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Works Technologies has no effect on the direction of OptiCept Technologies i.e., OptiCept Technologies and Bio Works go up and down completely randomly.
Pair Corralation between OptiCept Technologies and Bio Works
Assuming the 90 days trading horizon OptiCept Technologies AB is expected to generate 1.15 times more return on investment than Bio Works. However, OptiCept Technologies is 1.15 times more volatile than Bio Works Technologies AB. It trades about -0.07 of its potential returns per unit of risk. Bio Works Technologies AB is currently generating about -0.1 per unit of risk. If you would invest 675.00 in OptiCept Technologies AB on September 12, 2024 and sell it today you would lose (154.00) from holding OptiCept Technologies AB or give up 22.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
OptiCept Technologies AB vs. Bio Works Technologies AB
Performance |
| Timeline |
| OptiCept Technologies |
| Bio Works Technologies |
OptiCept Technologies and Bio Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OptiCept Technologies and Bio Works
The main advantage of trading using opposite OptiCept Technologies and Bio Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OptiCept Technologies position performs unexpectedly, Bio Works 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 Bio Works will offset losses from the drop in Bio Works' long position.| OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Atlas Copco AB | OptiCept Technologies vs. Trelleborg AB | OptiCept Technologies vs. Troax Group AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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