Correlation Between Optimi Health and Cybin

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

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

Diversification Opportunities for Optimi Health and Cybin

-0.57

Correlation Coefficient

Optimi Health  Cybin

Excellent diversification

The 3 months correlation between Optimi and Cybin is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Optimi Health Corp and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc and Optimi Health 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 Optimi Health Corp are associated (or correlated) with Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of Optimi Health i.e., Optimi Health and Cybin go up and down completely randomly.

Pair Corralation between Optimi Health and Cybin

Assuming the 90 days horizon Optimi Health Corp is expected to under-perform the Cybin. In addition to that, Optimi Health is 1.52 times more volatile than Cybin Inc. It trades about -0.02 of its total potential returns per unit of risk. Cybin Inc is currently generating about 0.11 per unit of volatility. If you would invest  760.00  in Cybin Inc on September 17, 2024 and sell it today you would earn a total of  231.00  from holding Cybin Inc or generate 30.39% return on investment over 90 days.

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

Optimi Health Corp  vs.  Cybin Inc

Optimi Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optimi Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cybin Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cybin Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, Cybin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optimi Health and Cybin

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

The idea behind Optimi Health Corp and Cybin Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.