Correlation Between Oramed Pharmaceuticals and MicroAlgo

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

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

Diversification Opportunities for Oramed Pharmaceuticals and MicroAlgo

-0.23

Correlation Coefficient

Oramed Pharmaceuticals  MicroAlgo

Very good diversification

The 3 months correlation between Oramed and MicroAlgo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oramed Pharmaceuticals and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo and Oramed Pharmaceuticals 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 Oramed Pharmaceuticals are associated (or correlated) with MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Oramed Pharmaceuticals i.e., Oramed Pharmaceuticals and MicroAlgo go up and down completely randomly.

Pair Corralation between Oramed Pharmaceuticals and MicroAlgo

Given the investment horizon of 90 days Oramed Pharmaceuticals is expected to generate 0.53 times more return on investment than MicroAlgo. However, Oramed Pharmaceuticals is 1.9 times less risky than MicroAlgo. It trades about -0.21 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.45 per unit of risk. If you would invest  276.00  in Oramed Pharmaceuticals on January 25, 2024 and sell it today you would lose (39.00) from holding Oramed Pharmaceuticals or give up 14.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Oramed Pharmaceuticals  vs.  MicroAlgo

Oramed Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oramed Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Oramed Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in May 2024.

MicroAlgo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oramed Pharmaceuticals and MicroAlgo

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

The idea behind Oramed Pharmaceuticals and MicroAlgo 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.