Correlation Between OSE Pharma and Spineguard
Can any of the company-specific risk be diversified away by investing in both OSE Pharma and Spineguard 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 OSE Pharma and Spineguard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSE Pharma SA and Spineguard, you can compare the effects of market volatilities on OSE Pharma and Spineguard 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 OSE Pharma with a short position of Spineguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSE Pharma and Spineguard.
Diversification Opportunities for OSE Pharma and Spineguard
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OSE and Spineguard is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding OSE Pharma SA and Spineguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spineguard and OSE Pharma 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 OSE Pharma SA are associated (or correlated) with Spineguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spineguard has no effect on the direction of OSE Pharma i.e., OSE Pharma and Spineguard go up and down completely randomly.
Pair Corralation between OSE Pharma and Spineguard
Assuming the 90 days trading horizon OSE Pharma SA is expected to generate 0.87 times more return on investment than Spineguard. However, OSE Pharma SA is 1.15 times less risky than Spineguard. It trades about -0.15 of its potential returns per unit of risk. Spineguard is currently generating about -0.26 per unit of risk. If you would invest 985.00 in OSE Pharma SA on August 27, 2024 and sell it today you would lose (89.00) from holding OSE Pharma SA or give up 9.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSE Pharma SA vs. Spineguard
Performance |
| Timeline |
| OSE Pharma SA |
| Spineguard |
OSE Pharma and Spineguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSE Pharma and Spineguard
The main advantage of trading using opposite OSE Pharma and Spineguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSE Pharma position performs unexpectedly, Spineguard 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 Spineguard will offset losses from the drop in Spineguard's long position.| OSE Pharma vs. Biomerieux SA | OSE Pharma vs. Eurofins Scientific SE | OSE Pharma vs. Sartorius Stedim Biotech | OSE Pharma vs. SEB SA |
| Spineguard vs. Biomerieux SA | Spineguard vs. Eurofins Scientific SE | Spineguard vs. Sartorius Stedim Biotech | Spineguard vs. SEB SA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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