Correlation Between Oncopeptides and Combigene

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

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

Diversification Opportunities for Oncopeptides and Combigene

-0.3

Correlation Coefficient

Oncopeptides  Combigene

Very good diversification

The 3 months correlation between Oncopeptides and Combigene is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oncopeptides AB and Combigene AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Combigene AB and Oncopeptides 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 Oncopeptides AB are associated (or correlated) with Combigene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Combigene AB has no effect on the direction of Oncopeptides i.e., Oncopeptides and Combigene go up and down completely randomly.

Pair Corralation between Oncopeptides and Combigene

Assuming the 90 days trading horizon Oncopeptides AB is expected to under-perform the Combigene. But the stock apears to be less risky and, when comparing its historical volatility, Oncopeptides AB is 2.17 times less risky than Combigene. The stock trades about -0.13 of its potential returns per unit of risk. The Combigene AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Combigene AB on September 13, 2024 and sell it today you would earn a total of  10.00  from holding Combigene AB or generate 4.0% return on investment over 90 days.

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

Oncopeptides AB  vs.  Combigene AB

Oncopeptides AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncopeptides AB 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Combigene AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Combigene AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Combigene unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oncopeptides and Combigene

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

The idea behind Oncopeptides AB and Combigene 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.