Correlation Between OKYO Pharma and Sharps Technology

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

By analyzing existing cross correlation between OKYO Pharma Ltd and Sharps Technology Warrant, you can compare the effects of market volatilities on OKYO Pharma and Sharps Technology 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 OKYO Pharma with a short position of Sharps Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of OKYO Pharma and Sharps Technology.

Diversification Opportunities for OKYO Pharma and Sharps Technology

-0.28

Correlation Coefficient

OKYO Pharma  Sharps Technology

Very good diversification

The 3 months correlation between OKYO and Sharps is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding OKYO Pharma Ltd and Sharps Technology Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology Warrant and OKYO 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 OKYO Pharma Ltd are associated (or correlated) with Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology Warrant has no effect on the direction of OKYO Pharma i.e., OKYO Pharma and Sharps Technology go up and down completely randomly.

Pair Corralation between OKYO Pharma and Sharps Technology

Given the investment horizon of 90 days OKYO Pharma Ltd is expected to under-perform the Sharps Technology. But the stock apears to be less risky and, when comparing its historical volatility, OKYO Pharma Ltd is 21.93 times less risky than Sharps Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Sharps Technology Warrant is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8.31  in Sharps Technology Warrant on August 30, 2024 and sell it today you would lose (5.31) from holding Sharps Technology Warrant or give up 63.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

OKYO Pharma Ltd  vs.  Sharps Technology Warrant

OKYO Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OKYO Pharma Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Sharps Technology Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with OKYO Pharma and Sharps Technology

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

The idea behind OKYO Pharma Ltd and Sharps Technology Warrant 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 CEOs Directory module to screen CEOs from public companies around the world.