Correlation Between United States and Opko Health
Can any of the company-specific risk be diversified away by investing in both United States and Opko Health 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 United States and Opko Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Opko Health, you can compare the effects of market volatilities on United States and Opko Health 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 United States with a short position of Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Opko Health.
Diversification Opportunities for United States and Opko Health
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Opko is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health and United States 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 United States Steel are associated (or correlated) with Opko Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opko Health has no effect on the direction of United States i.e., United States and Opko Health go up and down completely randomly.
Pair Corralation between United States and Opko Health
Taking into account the 90-day investment horizon United States Steel is expected to under-perform the Opko Health. But the stock apears to be less risky and, when comparing its historical volatility, United States Steel is 2.41 times less risky than Opko Health. The stock trades about -0.28 of its potential returns per unit of risk. The Opko Health is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 36,880 in Opko Health on January 26, 2024 and sell it today you would earn a total of 10,990 from holding Opko Health or generate 29.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
United States Steel vs. Opko Health
Performance |
| Timeline |
| United States Steel |
| Opko Health |
United States and Opko Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Opko Health
The main advantage of trading using opposite United States and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Opko Health 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 Opko Health will offset losses from the drop in Opko Health's long position.| United States vs. Cleveland Cliffs | United States vs. Reliance Steel Aluminum | United States vs. Ternium SA ADR |
| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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