Correlation Between Ozop Surgical and Novonix

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

By analyzing existing cross correlation between Ozop Surgical Corp and Novonix Ltd ADR, you can compare the effects of market volatilities on Ozop Surgical and Novonix 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 Ozop Surgical with a short position of Novonix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ozop Surgical and Novonix.

Diversification Opportunities for Ozop Surgical and Novonix

0.19

Correlation Coefficient

Ozop Surgical  Novonix

Average diversification

The 3 months correlation between Ozop and Novonix is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ozop Surgical Corp and Novonix Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novonix Ltd ADR and Ozop Surgical 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 Ozop Surgical Corp are associated (or correlated) with Novonix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novonix Ltd ADR has no effect on the direction of Ozop Surgical i.e., Ozop Surgical and Novonix go up and down completely randomly.

Pair Corralation between Ozop Surgical and Novonix

Given the investment horizon of 90 days Ozop Surgical Corp is expected to generate 1.72 times more return on investment than Novonix. However, Ozop Surgical is 1.72 times more volatile than Novonix Ltd ADR. It trades about -0.08 of its potential returns per unit of risk. Novonix Ltd ADR is currently generating about -0.28 per unit of risk. If you would invest  0.08  in Ozop Surgical Corp on September 27, 2024 and sell it today you would lose (0.02) from holding Ozop Surgical Corp or give up 25.0% of portfolio value over 90 days.

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

Ozop Surgical Corp  vs.  Novonix Ltd ADR

Ozop Surgical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ozop Surgical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Novonix Ltd ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Novonix Ltd ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Novonix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ozop Surgical and Novonix

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

The idea behind Ozop Surgical Corp and Novonix Ltd ADR 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.