Correlation Between Tela Bio and Odyssey Group

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

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

Diversification Opportunities for Tela Bio and Odyssey Group

-0.72

Correlation Coefficient

Tela Bio  Odyssey Group

Pay attention - limited upside

The 3 months correlation between Tela and Odyssey is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tela Bio and Odyssey Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Group Intern and Tela Bio 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 Tela Bio are associated (or correlated) with Odyssey Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Group Intern has no effect on the direction of Tela Bio i.e., Tela Bio and Odyssey Group go up and down completely randomly.

Pair Corralation between Tela Bio and Odyssey Group

Given the investment horizon of 90 days Tela Bio is expected to under-perform the Odyssey Group. But the stock apears to be less risky and, when comparing its historical volatility, Tela Bio is 3.69 times less risky than Odyssey Group. The stock trades about -0.12 of its potential returns per unit of risk. The Odyssey Group International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Odyssey Group International on September 15, 2024 and sell it today you would lose (2.60) from holding Odyssey Group International or give up 52.0% of portfolio value over 90 days.

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

Tela Bio  vs.  Odyssey Group International

Tela Bio

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tela Bio are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Tela Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Odyssey Group Intern

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Group International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Odyssey Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tela Bio and Odyssey Group

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

The idea behind Tela Bio and Odyssey Group International 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.