Correlation Between OPKO HEALTH and BII Railway
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and BII Railway 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 BII Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and BII Railway Transportation, you can compare the effects of market volatilities on OPKO HEALTH and BII Railway 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 BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and BII Railway.
Diversification Opportunities for OPKO HEALTH and BII Railway
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPKO and BII is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor 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 BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of OPKO HEALTH i.e., OPKO HEALTH and BII Railway go up and down completely randomly.
Pair Corralation between OPKO HEALTH and BII Railway
Assuming the 90 days trading horizon OPKO HEALTH is expected to generate 0.38 times more return on investment than BII Railway. However, OPKO HEALTH is 2.61 times less risky than BII Railway. It trades about 0.06 of its potential returns per unit of risk. BII Railway Transportation is currently generating about -0.04 per unit of risk. If you would invest 142.00 in OPKO HEALTH on November 3, 2024 and sell it today you would earn a total of 1.00 from holding OPKO HEALTH or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. BII Railway Transportation
Performance |
| Timeline |
| OPKO HEALTH |
| BII Railway Transpor |
OPKO HEALTH and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and BII Railway
The main advantage of trading using opposite OPKO HEALTH and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| OPKO HEALTH vs. SIVERS SEMICONDUCTORS AB | OPKO HEALTH vs. NorAm Drilling AS | OPKO HEALTH vs. Volkswagen AG | OPKO HEALTH vs. Darden Restaurants |
| BII Railway vs. Accenture plc | BII Railway vs. International Business Machines | BII Railway vs. International Business Machines | BII Railway vs. Capgemini SE |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |