Correlation Between Opko Health and Nio
Can any of the company-specific risk be diversified away by investing in both Opko Health and Nio 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 Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Nio Class A, you can compare the effects of market volatilities on Opko Health and Nio 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 Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Nio.
Diversification Opportunities for Opko Health and Nio
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Opko and Nio is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A 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 Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of Opko Health i.e., Opko Health and Nio go up and down completely randomly.
Pair Corralation between Opko Health and Nio
Considering the 90-day investment horizon Opko Health is expected to generate 1.36 times more return on investment than Nio. However, Opko Health is 1.36 times more volatile than Nio Class A. It trades about 0.41 of its potential returns per unit of risk. Nio Class A is currently generating about -0.41 per unit of risk. If you would invest 87.00 in Opko Health on January 19, 2024 and sell it today you would earn a total of 38.00 from holding Opko Health or generate 43.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Opko Health vs. Nio Class A
Performance |
| Timeline |
| Opko Health |
| Nio Class A |
Opko Health and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Opko Health and Nio
The main advantage of trading using opposite Opko Health and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, Nio 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 Nio will offset losses from the drop in Nio's long position.| Opko Health vs. Twist Bioscience Corp | Opko Health vs. Guardant Health | Opko Health vs. DermTech | Opko Health vs. Agilent Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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