Correlation Between Teva Pharmaceutical and Opko Health
Can any of the company-specific risk be diversified away by investing in both Teva Pharmaceutical 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 Teva Pharmaceutical and Opko Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharmaceutical Industries and Opko Health, you can compare the effects of market volatilities on Teva Pharmaceutical 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 Teva Pharmaceutical with a short position of Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharmaceutical and Opko Health.
Diversification Opportunities for Teva Pharmaceutical and Opko Health
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teva and Opko is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharmaceutical Industries and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health and Teva Pharmaceutical 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 Teva Pharmaceutical Industries 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 Teva Pharmaceutical i.e., Teva Pharmaceutical and Opko Health go up and down completely randomly.
Pair Corralation between Teva Pharmaceutical and Opko Health
Assuming the 90 days trading horizon Teva Pharmaceutical Industries is expected to under-perform the Opko Health. But the stock apears to be less risky and, when comparing its historical volatility, Teva Pharmaceutical Industries is 2.81 times less risky than Opko Health. The stock trades about -0.37 of its potential returns per unit of risk. The Opko Health is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 53,580 in Opko Health on August 29, 2024 and sell it today you would earn a total of 1,130 from holding Opko Health or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharmaceutical Industries vs. Opko Health
Performance |
| Timeline |
| Teva Pharmaceutical |
| Opko Health |
Teva Pharmaceutical and Opko Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharmaceutical and Opko Health
The main advantage of trading using opposite Teva Pharmaceutical and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharmaceutical 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.| Teva Pharmaceutical vs. Bezeq Israeli Telecommunication | Teva Pharmaceutical vs. El Al Israel | Teva Pharmaceutical vs. Bank Leumi Le Israel | Teva Pharmaceutical vs. Elbit Systems |
| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |