Correlation Between OSE Pharma and Implanet

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

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

Diversification Opportunities for OSE Pharma and Implanet

0.59

Correlation Coefficient

OSE Pharma  Implanet

Very weak diversification

The 3 months correlation between OSE and Implanet is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding OSE Pharma SA and Implanet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implanet SA and OSE 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 OSE Pharma SA are associated (or correlated) with Implanet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implanet SA has no effect on the direction of OSE Pharma i.e., OSE Pharma and Implanet go up and down completely randomly.

Pair Corralation between OSE Pharma and Implanet

Assuming the 90 days trading horizon OSE Pharma SA is expected to under-perform the Implanet. In addition to that, OSE Pharma is 1.02 times more volatile than Implanet SA. It trades about -0.24 of its total potential returns per unit of risk. Implanet SA is currently generating about -0.07 per unit of volatility. If you would invest  12.00  in Implanet SA on September 26, 2024 and sell it today you would lose (1.00) from holding Implanet SA or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

OSE Pharma SA  vs.  Implanet SA

OSE Pharma SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OSE Pharma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, OSE Pharma is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Implanet SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implanet SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Implanet is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with OSE Pharma and Implanet

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

The idea behind OSE Pharma SA and Implanet SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.