Correlation Between Scpharmaceuticals and Oncolytics Biotech

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

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

Diversification Opportunities for Scpharmaceuticals and Oncolytics Biotech

-0.28

Correlation Coefficient

Scpharmaceuticals  Oncolytics Biotech

Very good diversification

The 3 months correlation between Scpharmaceuticals and Oncolytics is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Scpharmaceuticals and Oncolytics Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncolytics Biotech and Scpharmaceuticals 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 Scpharmaceuticals are associated (or correlated) with Oncolytics Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncolytics Biotech has no effect on the direction of Scpharmaceuticals i.e., Scpharmaceuticals and Oncolytics Biotech go up and down completely randomly.

Pair Corralation between Scpharmaceuticals and Oncolytics Biotech

Given the investment horizon of 90 days Scpharmaceuticals is expected to under-perform the Oncolytics Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Scpharmaceuticals is 1.52 times less risky than Oncolytics Biotech. The stock trades about -0.1 of its potential returns per unit of risk. The Oncolytics Biotech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Oncolytics Biotech on August 31, 2024 and sell it today you would lose (2.00) from holding Oncolytics Biotech or give up 2.11% of portfolio value over 90 days.

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

Scpharmaceuticals  vs.  Oncolytics Biotech

Scpharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scpharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Oncolytics Biotech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oncolytics Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Oncolytics Biotech may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Scpharmaceuticals and Oncolytics Biotech

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

The idea behind Scpharmaceuticals and Oncolytics Biotech 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 Anywhere module to track or share privately all of your investments from the convenience of any device.