Correlation Between OPKO HEALTH and MPH Health
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and MPH 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 OPKO HEALTH and MPH Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and MPH Health Care, you can compare the effects of market volatilities on OPKO HEALTH and MPH 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 OPKO HEALTH with a short position of MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and MPH Health.
Diversification Opportunities for OPKO HEALTH and MPH Health
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between OPKO and MPH is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of OPKO HEALTH i.e., OPKO HEALTH and MPH Health go up and down completely randomly.
Pair Corralation between OPKO HEALTH and MPH Health
Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 1.0 times more return on investment than MPH Health. However, OPKO HEALTH is 1.0 times more volatile than MPH Health Care. It trades about 0.19 of its potential returns per unit of risk. MPH Health Care is currently generating about -0.31 per unit of risk. If you would invest 142.00 in OPKO HEALTH on November 7, 2024 and sell it today you would earn a total of 4.00 from holding OPKO HEALTH or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
OPKO HEALTH vs. MPH Health Care
Performance |
| Timeline |
| OPKO HEALTH |
| MPH Health Care |
OPKO HEALTH and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and MPH Health
The main advantage of trading using opposite OPKO HEALTH and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH position performs unexpectedly, MPH 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 MPH Health will offset losses from the drop in MPH Health's long position.| OPKO HEALTH vs. SINGAPORE AIRLINES | OPKO HEALTH vs. CLEAN ENERGY FUELS | OPKO HEALTH vs. AEGEAN AIRLINES | OPKO HEALTH vs. CVW CLEANTECH INC |
| MPH Health vs. SIVERS SEMICONDUCTORS AB | MPH Health vs. NorAm Drilling AS | MPH Health vs. Volkswagen AG | MPH Health vs. Darden Restaurants |
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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