Correlation Between HUTCHMED DRC and Oasmia Pharmaceutical

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

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

Diversification Opportunities for HUTCHMED DRC and Oasmia Pharmaceutical

0.64

Correlation Coefficient

HUTCHMED DRC  Oasmia Pharmaceutical

Poor diversification

The 3 months correlation between HUTCHMED and Oasmia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and Oasmia Pharmaceutical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasmia Pharmaceutical and HUTCHMED DRC 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 HUTCHMED DRC are associated (or correlated) with Oasmia Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasmia Pharmaceutical has no effect on the direction of HUTCHMED DRC i.e., HUTCHMED DRC and Oasmia Pharmaceutical go up and down completely randomly.

Pair Corralation between HUTCHMED DRC and Oasmia Pharmaceutical

If you would invest  6.00  in Oasmia Pharmaceutical AB on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Oasmia Pharmaceutical AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

HUTCHMED DRC  vs.  Oasmia Pharmaceutical AB

HUTCHMED DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUTCHMED DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, HUTCHMED DRC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Oasmia Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oasmia Pharmaceutical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Oasmia Pharmaceutical is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUTCHMED DRC and Oasmia Pharmaceutical

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

The idea behind HUTCHMED DRC and Oasmia Pharmaceutical AB 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.