Correlation Between OPKO HEALTH and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and Gemfields Group 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 OPKO HEALTH and Gemfields Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and Gemfields Group Limited, you can compare the effects of market volatilities on OPKO HEALTH and Gemfields Group 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 OPKO HEALTH with a short position of Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and Gemfields Group.
Diversification Opportunities for OPKO HEALTH and Gemfields Group
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPKO and Gemfields is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group and OPKO HEALTH 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 OPKO HEALTH are associated (or correlated) with Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of OPKO HEALTH i.e., OPKO HEALTH and Gemfields Group go up and down completely randomly.
Pair Corralation between OPKO HEALTH and Gemfields Group
Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 0.11 times more return on investment than Gemfields Group. However, OPKO HEALTH is 8.79 times less risky than Gemfields Group. It trades about -0.09 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.22 per unit of risk. If you would invest 146.00 in OPKO HEALTH on October 28, 2024 and sell it today you would lose (2.00) from holding OPKO HEALTH or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. Gemfields Group Limited
Performance |
| Timeline |
| OPKO HEALTH |
| Gemfields Group |
OPKO HEALTH and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and Gemfields Group
The main advantage of trading using opposite OPKO HEALTH and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| OPKO HEALTH vs. SIEM OFFSHORE NEW | OPKO HEALTH vs. De Grey Mining | OPKO HEALTH vs. Nok Airlines PCL | OPKO HEALTH vs. JAPAN AIRLINES |
| Gemfields Group vs. Darden Restaurants | Gemfields Group vs. RCI Hospitality Holdings | Gemfields Group vs. OPKO HEALTH | Gemfields Group vs. US Physical Therapy |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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