Correlation Between Opko Health and DermTech
Can any of the company-specific risk be diversified away by investing in both Opko Health and DermTech 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 DermTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and DermTech, you can compare the effects of market volatilities on Opko Health and DermTech 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 DermTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and DermTech.
Diversification Opportunities for Opko Health and DermTech
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Opko and DermTech is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and DermTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DermTech 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 DermTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DermTech has no effect on the direction of Opko Health i.e., Opko Health and DermTech go up and down completely randomly.
Pair Corralation between Opko Health and DermTech
Considering the 90-day investment horizon Opko Health is expected to generate 0.61 times more return on investment than DermTech. However, Opko Health is 1.64 times less risky than DermTech. It trades about 0.13 of its potential returns per unit of risk. DermTech is currently generating about -0.22 per unit of risk. If you would invest 103.00 in Opko Health on February 19, 2024 and sell it today you would earn a total of 29.00 from holding Opko Health or generate 28.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Opko Health vs. DermTech
Performance |
Timeline |
Opko Health |
DermTech |
Opko Health and DermTech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Opko Health and DermTech
The main advantage of trading using opposite Opko Health and DermTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, DermTech 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 DermTech will offset losses from the drop in DermTech's long position.Opko Health vs. Olink Holding AB | Opko Health vs. IQVIA Holdings | Opko Health vs. Medpace Holdings | Opko Health vs. ICON PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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