Correlation Between OPKO HEALTH and SPAREBK 1
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and SPAREBK 1 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 SPAREBK 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and SPAREBK 1 NORD NORGE, you can compare the effects of market volatilities on OPKO HEALTH and SPAREBK 1 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 SPAREBK 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and SPAREBK 1.
Diversification Opportunities for OPKO HEALTH and SPAREBK 1
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OPKO and SPAREBK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and SPAREBK 1 NORD NORGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAREBK 1 NORD 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 SPAREBK 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAREBK 1 NORD has no effect on the direction of OPKO HEALTH i.e., OPKO HEALTH and SPAREBK 1 go up and down completely randomly.
Pair Corralation between OPKO HEALTH and SPAREBK 1
Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 2.91 times more return on investment than SPAREBK 1. However, OPKO HEALTH is 2.91 times more volatile than SPAREBK 1 NORD NORGE. It trades about 0.31 of its potential returns per unit of risk. SPAREBK 1 NORD NORGE is currently generating about -0.09 per unit of risk. If you would invest 153.00 in OPKO HEALTH on December 11, 2024 and sell it today you would earn a total of 25.00 from holding OPKO HEALTH or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. SPAREBK 1 NORD NORGE
Performance |
| Timeline |
| OPKO HEALTH |
| SPAREBK 1 NORD |
OPKO HEALTH and SPAREBK 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and SPAREBK 1
The main advantage of trading using opposite OPKO HEALTH and SPAREBK 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH position performs unexpectedly, SPAREBK 1 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 SPAREBK 1 will offset losses from the drop in SPAREBK 1's long position.| OPKO HEALTH vs. New China Life | OPKO HEALTH vs. REVO INSURANCE SPA | OPKO HEALTH vs. ZhongAn Online P | OPKO HEALTH vs. Gaztransport Technigaz SA |
| SPAREBK 1 vs. QBE Insurance Group | SPAREBK 1 vs. PANIN INSURANCE | SPAREBK 1 vs. Compugroup Medical SE | SPAREBK 1 vs. REVO INSURANCE SPA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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