Correlation Between Brighten Optix and Ok Biotech

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

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

Diversification Opportunities for Brighten Optix and Ok Biotech

0.88

Correlation Coefficient

Brighten Optix  Ok Biotech

Very poor diversification

The 3 months correlation between Brighten and 4155 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brighten Optix and Ok Biotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ok Biotech and Brighten Optix 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 Brighten Optix are associated (or correlated) with Ok Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ok Biotech has no effect on the direction of Brighten Optix i.e., Brighten Optix and Ok Biotech go up and down completely randomly.

Pair Corralation between Brighten Optix and Ok Biotech

Assuming the 90 days trading horizon Brighten Optix is expected to under-perform the Ok Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Brighten Optix is 1.32 times less risky than Ok Biotech. The stock trades about -0.23 of its potential returns per unit of risk. The Ok Biotech Co is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  2,489  in Ok Biotech Co on September 2, 2024 and sell it today you would lose (284.00) from holding Ok Biotech Co or give up 11.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Brighten Optix  vs.  Ok Biotech Co

Brighten Optix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brighten Optix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ok Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ok Biotech Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Brighten Optix and Ok Biotech

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

The idea behind Brighten Optix and Ok Biotech Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.