Correlation Between Oric PharmaceuticalsI and Grab Holdings

Can any of the company-specific risk be diversified away by investing in both Oric PharmaceuticalsI and Grab Holdings 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 Oric PharmaceuticalsI and Grab Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oric PharmaceuticalsInc and Grab Holdings, you can compare the effects of market volatilities on Oric PharmaceuticalsI and Grab Holdings 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 Oric PharmaceuticalsI with a short position of Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oric PharmaceuticalsI and Grab Holdings.

Diversification Opportunities for Oric PharmaceuticalsI and Grab Holdings

-0.32

Correlation Coefficient

Oric PharmaceuticalsI  Grab Holdings

Very good diversification

The 3 months correlation between Oric and Grab is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oric PharmaceuticalsInc and Grab Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings and Oric PharmaceuticalsI 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 Oric PharmaceuticalsInc are associated (or correlated) with Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings has no effect on the direction of Oric PharmaceuticalsI i.e., Oric PharmaceuticalsI and Grab Holdings go up and down completely randomly.

Pair Corralation between Oric PharmaceuticalsI and Grab Holdings

Given the investment horizon of 90 days Oric PharmaceuticalsInc is expected to under-perform the Grab Holdings. In addition to that, Oric PharmaceuticalsI is 2.4 times more volatile than Grab Holdings. It trades about -0.11 of its total potential returns per unit of risk. Grab Holdings is currently generating about 0.09 per unit of volatility. If you would invest  316.00  in Grab Holdings on January 24, 2024 and sell it today you would earn a total of  19.00  from holding Grab Holdings or generate 6.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Oric PharmaceuticalsInc  vs.  Grab Holdings

Oric PharmaceuticalsInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oric PharmaceuticalsInc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Grab Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grab Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Grab Holdings may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Oric PharmaceuticalsI and Grab Holdings

The main advantage of trading using opposite Oric PharmaceuticalsI and Grab Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oric PharmaceuticalsI position performs unexpectedly, Grab Holdings 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 Grab Holdings will offset losses from the drop in Grab Holdings' long position.

The idea behind Oric PharmaceuticalsInc and Grab Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.