Correlation Between Oxford BioDynamics and Northwest Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Oxford BioDynamics and Northwest Biotherapeutics 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 Northwest Biotherapeutics 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 Northwest Biotherapeutics, you can compare the effects of market volatilities on Oxford BioDynamics and Northwest Biotherapeutics 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 Northwest Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford BioDynamics and Northwest Biotherapeutics.
Diversification Opportunities for Oxford BioDynamics and Northwest Biotherapeutics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oxford and Northwest is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oxford BioDynamics Plc and Northwest Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Biotherapeutics 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 Northwest Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Biotherapeutics has no effect on the direction of Oxford BioDynamics i.e., Oxford BioDynamics and Northwest Biotherapeutics go up and down completely randomly.
Pair Corralation between Oxford BioDynamics and Northwest Biotherapeutics
Assuming the 90 days horizon Oxford BioDynamics Plc is expected to generate 15.96 times more return on investment than Northwest Biotherapeutics. However, Oxford BioDynamics is 15.96 times more volatile than Northwest Biotherapeutics. It trades about 0.05 of its potential returns per unit of risk. Northwest Biotherapeutics is currently generating about -0.08 per unit of risk. If you would invest 30.00 in Oxford BioDynamics Plc on September 12, 2024 and sell it today you would lose (29.00) from holding Oxford BioDynamics Plc or give up 96.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Oxford BioDynamics Plc vs. Northwest Biotherapeutics
Performance |
| Timeline |
| Oxford BioDynamics Plc |
| Northwest Biotherapeutics |
Oxford BioDynamics and Northwest Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford BioDynamics and Northwest Biotherapeutics
The main advantage of trading using opposite Oxford BioDynamics and Northwest Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford BioDynamics position performs unexpectedly, Northwest Biotherapeutics 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 Northwest Biotherapeutics will offset losses from the drop in Northwest Biotherapeutics' long position.| Oxford BioDynamics vs. Protalix Biotherapeutics | Oxford BioDynamics vs. Seres Therapeutics | Oxford BioDynamics vs. Cidara Therapeutics | Oxford BioDynamics vs. Immunitybio |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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