Correlation Between Global Knafaim and Opko Health

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

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

Diversification Opportunities for Global Knafaim and Opko Health

-0.27

Correlation Coefficient

Global Knafaim  Opko Health

Very good diversification

The 3 months correlation between Global and Opko is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Global Knafaim Leasing and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health and Global Knafaim 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 Global Knafaim Leasing are associated (or correlated) with Opko Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opko Health has no effect on the direction of Global Knafaim i.e., Global Knafaim and Opko Health go up and down completely randomly.

Pair Corralation between Global Knafaim and Opko Health

Assuming the 90 days trading horizon Global Knafaim Leasing is expected to generate 0.66 times more return on investment than Opko Health. However, Global Knafaim Leasing is 1.51 times less risky than Opko Health. It trades about 0.28 of its potential returns per unit of risk. Opko Health is currently generating about 0.01 per unit of risk. If you would invest  5,720  in Global Knafaim Leasing on September 16, 2024 and sell it today you would earn a total of  2,230  from holding Global Knafaim Leasing or generate 38.99% return on investment over 90 days.

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

Global Knafaim Leasing  vs.  Opko Health

Global Knafaim Leasing

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Knafaim Leasing are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Global Knafaim sustained solid returns over the last few months and may actually be approaching a breakup point.

Opko Health

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Opko Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Opko Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Knafaim and Opko Health

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

The idea behind Global Knafaim Leasing and Opko Health 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.