Correlation Between Realty Income and OPKO HEALTH
Can any of the company-specific risk be diversified away by investing in both Realty Income and OPKO HEALTH 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 Realty Income and OPKO HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and OPKO HEALTH, you can compare the effects of market volatilities on Realty Income and OPKO HEALTH 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 Realty Income with a short position of OPKO HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and OPKO HEALTH.
Diversification Opportunities for Realty Income and OPKO HEALTH
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Realty and OPKO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and OPKO HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPKO HEALTH and Realty Income 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 Realty Income are associated (or correlated) with OPKO HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPKO HEALTH has no effect on the direction of Realty Income i.e., Realty Income and OPKO HEALTH go up and down completely randomly.
Pair Corralation between Realty Income and OPKO HEALTH
Assuming the 90 days horizon Realty Income is expected to generate 0.84 times more return on investment than OPKO HEALTH. However, Realty Income is 1.19 times less risky than OPKO HEALTH. It trades about 0.3 of its potential returns per unit of risk. OPKO HEALTH is currently generating about -0.24 per unit of risk. If you would invest 5,057 in Realty Income on October 24, 2024 and sell it today you would earn a total of 248.00 from holding Realty Income or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. OPKO HEALTH
Performance |
| Timeline |
| Realty Income |
| OPKO HEALTH |
Realty Income and OPKO HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and OPKO HEALTH
The main advantage of trading using opposite Realty Income and OPKO HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income position performs unexpectedly, OPKO HEALTH 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 OPKO HEALTH will offset losses from the drop in OPKO HEALTH's long position.| Realty Income vs. VELA TECHNOLPLC LS 0001 | Realty Income vs. Bio Techne Corp | Realty Income vs. AIR PRODCHEMICALS | Realty Income vs. TIANDE CHEMICAL |
| OPKO HEALTH vs. UNIQA INSURANCE GR | OPKO HEALTH vs. VIRGIN WINES UK | OPKO HEALTH vs. Goosehead Insurance | OPKO HEALTH vs. Selective Insurance Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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