Correlation Between Opko Health and Israel Discount
Can any of the company-specific risk be diversified away by investing in both Opko Health and Israel Discount 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 Israel Discount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Israel Discount Bank, you can compare the effects of market volatilities on Opko Health and Israel Discount 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 Israel Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Israel Discount.
Diversification Opportunities for Opko Health and Israel Discount
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Opko and Israel is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Israel Discount Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Discount Bank 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 Israel Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Discount Bank has no effect on the direction of Opko Health i.e., Opko Health and Israel Discount go up and down completely randomly.
Pair Corralation between Opko Health and Israel Discount
Assuming the 90 days trading horizon Opko Health is expected to generate 1.66 times more return on investment than Israel Discount. However, Opko Health is 1.66 times more volatile than Israel Discount Bank. It trades about 0.54 of its potential returns per unit of risk. Israel Discount Bank is currently generating about 0.0 per unit of risk. If you would invest 31,960 in Opko Health on January 19, 2024 and sell it today you would earn a total of 15,240 from holding Opko Health or generate 47.68% 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. Israel Discount Bank
Performance |
| Timeline |
| Opko Health |
| Israel Discount Bank |
Opko Health and Israel Discount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opko Health and Israel Discount
The main advantage of trading using opposite Opko Health and Israel Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, Israel Discount 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 Israel Discount will offset losses from the drop in Israel Discount's long position.| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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