Correlation Between Cybin and Opthea

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

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

Diversification Opportunities for Cybin and Opthea

0.12

Correlation Coefficient

Cybin  Opthea

Average diversification

The 3 months correlation between Cybin and Opthea is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cybin Inc and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea and Cybin 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 Cybin Inc are associated (or correlated) with Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of Cybin i.e., Cybin and Opthea go up and down completely randomly.

Pair Corralation between Cybin and Opthea

Given the investment horizon of 90 days Cybin Inc is expected to generate 1.12 times more return on investment than Opthea. However, Cybin is 1.12 times more volatile than Opthea. It trades about 0.1 of its potential returns per unit of risk. Opthea is currently generating about 0.0 per unit of risk. If you would invest  775.00  in Cybin Inc on September 18, 2024 and sell it today you would earn a total of  216.00  from holding Cybin Inc or generate 27.87% return on investment over 90 days.

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

Cybin Inc  vs.  Opthea

Cybin Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cybin Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, Cybin displayed solid returns over the last few months and may actually be approaching a breakup point.

Opthea

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Opthea has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Opthea is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cybin and Opthea

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

The idea behind Cybin Inc and Opthea 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.