Correlation Between Zealand Pharma and Oncopeptides
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma and Oncopeptides 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 Zealand Pharma and Oncopeptides into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and Oncopeptides AB, you can compare the effects of market volatilities on Zealand Pharma and Oncopeptides 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 Zealand Pharma with a short position of Oncopeptides. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and Oncopeptides.
Diversification Opportunities for Zealand Pharma and Oncopeptides
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zealand and Oncopeptides is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and Oncopeptides AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncopeptides AB and Zealand Pharma 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 Zealand Pharma AS are associated (or correlated) with Oncopeptides. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncopeptides AB has no effect on the direction of Zealand Pharma i.e., Zealand Pharma and Oncopeptides go up and down completely randomly.
Pair Corralation between Zealand Pharma and Oncopeptides
Assuming the 90 days trading horizon Zealand Pharma AS is expected to generate 0.71 times more return on investment than Oncopeptides. However, Zealand Pharma AS is 1.4 times less risky than Oncopeptides. It trades about 0.35 of its potential returns per unit of risk. Oncopeptides AB is currently generating about 0.08 per unit of risk. If you would invest 67,650 in Zealand Pharma AS on September 19, 2024 and sell it today you would earn a total of 12,250 from holding Zealand Pharma AS or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zealand Pharma AS vs. Oncopeptides AB
Performance |
| Timeline |
| Zealand Pharma AS |
| Oncopeptides AB |
Zealand Pharma and Oncopeptides Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and Oncopeptides
The main advantage of trading using opposite Zealand Pharma and Oncopeptides positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma position performs unexpectedly, Oncopeptides 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 Oncopeptides will offset losses from the drop in Oncopeptides' long position.| Zealand Pharma vs. Ambu AS | Zealand Pharma vs. DSV Panalpina AS | Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. GN Store Nord |
| Oncopeptides vs. Hansa Biopharma AB | Oncopeptides vs. BioArctic AB | Oncopeptides vs. Sinch AB | Oncopeptides vs. Cantargia AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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