Correlation Between Opko Health and Waters
Can any of the company-specific risk be diversified away by investing in both Opko Health and Waters 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 Waters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Opko Health and Waters, you can compare the effects of market volatilities on Opko Health and Waters 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 Waters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and Waters.
Diversification Opportunities for Opko Health and Waters
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Opko and Waters is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters 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 Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Opko Health i.e., Opko Health and Waters go up and down completely randomly.
Pair Corralation between Opko Health and Waters
Considering the 90-day investment horizon Opko Health is expected to under-perform the Waters. In addition to that, Opko Health is 1.26 times more volatile than Waters. It trades about -0.11 of its total potential returns per unit of risk. Waters is currently generating about -0.07 per unit of volatility. If you would invest 33,904 in Waters on February 8, 2024 and sell it today you would lose (1,298) from holding Waters or give up 3.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Opko Health vs. Waters
Performance |
Timeline |
Opko Health |
Waters |
Opko Health and Waters Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Opko Health and Waters
The main advantage of trading using opposite Opko Health and Waters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opko Health position performs unexpectedly, Waters 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 Waters will offset losses from the drop in Waters' long position.Opko Health vs. Qiagen NV | Opko Health vs. Olink Holding AB | Opko Health vs. Aclaris Therapeutics | Opko Health vs. IQVIA Holdings |
Waters vs. IDEXX Laboratories | Waters vs. Thermo Fisher Scientific | Waters vs. Guardant Health | Waters vs. Charles River Laboratories |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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