Correlation Between Opko Health and International Business
Can any of the company-specific risk be diversified away by investing in both Opko Health and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and International Business Machines, you can compare the effects of market volatilities on Opko Health and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and International Business.
Diversification Opportunities for Opko Health and International Business
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Opko and International is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Opko Health i.e., Opko Health and International Business go up and down completely randomly.
Pair Corralation between Opko Health and International Business
Assuming the 90 days trading horizon Opko Health is expected to generate 4.73 times more return on investment than International Business. However, Opko Health is 4.73 times more volatile than International Business Machines. It trades about 0.42 of its potential returns per unit of risk. International Business Machines is currently generating about -0.2 per unit of risk. If you would invest 34,440 in Opko Health on January 23, 2024 and sell it today you would earn a total of 11,410 from holding Opko Health or generate 33.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.0% |
Values | Daily Returns |
Opko Health vs. International Business Machine
Performance |
Timeline |
Opko Health |
International Business |
Opko Health and International Business Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Opko Health and International Business
The main advantage of trading using opposite Opko Health and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
International Business vs. FiscalNote Holdings | International Business vs. Innodata | International Business vs. Aurora Innovation | International Business vs. Conduent |
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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