Correlation Between Maat Pharma and OPmobility

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

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

Diversification Opportunities for Maat Pharma and OPmobility

0.31

Correlation Coefficient

Maat Pharma  OPmobility

Weak diversification

The 3 months correlation between Maat and OPmobility is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Maat Pharma SA and OPmobility SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPmobility SE and Maat Pharma 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 Maat Pharma SA are associated (or correlated) with OPmobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPmobility SE has no effect on the direction of Maat Pharma i.e., Maat Pharma and OPmobility go up and down completely randomly.

Pair Corralation between Maat Pharma and OPmobility

Assuming the 90 days trading horizon Maat Pharma is expected to generate 2.01 times less return on investment than OPmobility. But when comparing it to its historical volatility, Maat Pharma SA is 1.43 times less risky than OPmobility. It trades about 0.06 of its potential returns per unit of risk. OPmobility SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  866.00  in OPmobility SE on September 26, 2024 and sell it today you would earn a total of  113.00  from holding OPmobility SE or generate 13.05% return on investment over 90 days.

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

Maat Pharma SA  vs.  OPmobility SE

Maat Pharma SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maat Pharma SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maat Pharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

OPmobility SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OPmobility SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, OPmobility sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maat Pharma and OPmobility

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

The idea behind Maat Pharma SA and OPmobility SE 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.