Correlation Between Fair Isaac and Omeros

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

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

Diversification Opportunities for Fair Isaac and Omeros

0.78

Correlation Coefficient

Fair Isaac  Omeros

Poor diversification

The 3 months correlation between Fair and Omeros is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of Fair Isaac i.e., Fair Isaac and Omeros go up and down completely randomly.

Pair Corralation between Fair Isaac and Omeros

Assuming the 90 days trading horizon Fair Isaac is expected to generate 6.49 times less return on investment than Omeros. But when comparing it to its historical volatility, Fair Isaac Corp is 4.82 times less risky than Omeros. It trades about 0.11 of its potential returns per unit of risk. Omeros is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  349.00  in Omeros on September 20, 2024 and sell it today you would earn a total of  369.00  from holding Omeros or generate 105.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Fair Isaac Corp  vs.  Omeros

Fair Isaac Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fair Isaac unveiled solid returns over the last few months and may actually be approaching a breakup point.

Omeros

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Omeros are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Omeros reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fair Isaac and Omeros

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

The idea behind Fair Isaac Corp and Omeros 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.