Correlation Between OSE Pharma and Intrasense

Can any of the company-specific risk be diversified away by investing in both OSE Pharma and Intrasense 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 Intrasense 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 Intrasense, you can compare the effects of market volatilities on OSE Pharma and Intrasense 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 Intrasense. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSE Pharma and Intrasense.

Diversification Opportunities for OSE Pharma and Intrasense

-0.15

Correlation Coefficient

OSE Pharma  Intrasense

Good diversification

The 3 months correlation between OSE and Intrasense is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding OSE Pharma SA and Intrasense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrasense 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 Intrasense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrasense has no effect on the direction of OSE Pharma i.e., OSE Pharma and Intrasense go up and down completely randomly.

Pair Corralation between OSE Pharma and Intrasense

Assuming the 90 days trading horizon OSE Pharma SA is expected to generate 0.98 times more return on investment than Intrasense. However, OSE Pharma SA is 1.02 times less risky than Intrasense. It trades about -0.03 of its potential returns per unit of risk. Intrasense is currently generating about -0.11 per unit of risk. If you would invest  788.00  in OSE Pharma SA on September 25, 2024 and sell it today you would lose (87.00) from holding OSE Pharma SA or give up 11.04% of portfolio value over 90 days.

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

OSE Pharma SA  vs.  Intrasense

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 latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intrasense

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrasense has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with OSE Pharma and Intrasense

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

The idea behind OSE Pharma SA and Intrasense 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.