Correlation Between Oxford BioDynamics and ChitogenX

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Oxford BioDynamics and ChitogenX 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 Oxford BioDynamics and ChitogenX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford BioDynamics Plc and ChitogenX, you can compare the effects of market volatilities on Oxford BioDynamics and ChitogenX 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 Oxford BioDynamics with a short position of ChitogenX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford BioDynamics and ChitogenX.

Diversification Opportunities for Oxford BioDynamics and ChitogenX

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Oxford and ChitogenX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oxford BioDynamics Plc and ChitogenX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChitogenX and Oxford BioDynamics 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 Oxford BioDynamics Plc are associated (or correlated) with ChitogenX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChitogenX has no effect on the direction of Oxford BioDynamics i.e., Oxford BioDynamics and ChitogenX go up and down completely randomly.

Pair Corralation between Oxford BioDynamics and ChitogenX

Assuming the 90 days horizon Oxford BioDynamics Plc is expected to under-perform the ChitogenX. In addition to that, Oxford BioDynamics is 15.53 times more volatile than ChitogenX. It trades about -0.22 of its total potential returns per unit of risk. ChitogenX is currently generating about -0.12 per unit of volatility. If you would invest  0.52  in ChitogenX on September 14, 2024 and sell it today you would lose (0.01) from holding ChitogenX or give up 1.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.45%
ValuesDaily Returns

Oxford BioDynamics Plc  vs.  ChitogenX

 Performance 
       Timeline  
Oxford BioDynamics Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oxford BioDynamics Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
ChitogenX 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ChitogenX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Oxford BioDynamics and ChitogenX Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oxford BioDynamics and ChitogenX

The main advantage of trading using opposite Oxford BioDynamics and ChitogenX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford BioDynamics position performs unexpectedly, ChitogenX 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 ChitogenX will offset losses from the drop in ChitogenX's long position.
The idea behind Oxford BioDynamics Plc and ChitogenX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
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
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital