Correlation Between Therasense and Oncology Pharma
Can any of the company-specific risk be diversified away by investing in both Therasense and Oncology Pharma 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 Therasense and Oncology Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Therasense and Oncology Pharma, you can compare the effects of market volatilities on Therasense and Oncology Pharma 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 Therasense with a short position of Oncology Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Therasense and Oncology Pharma.
Diversification Opportunities for Therasense and Oncology Pharma
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Therasense and Oncology is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Therasense and Oncology Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncology Pharma and Therasense 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 Therasense are associated (or correlated) with Oncology Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncology Pharma has no effect on the direction of Therasense i.e., Therasense and Oncology Pharma go up and down completely randomly.
Pair Corralation between Therasense and Oncology Pharma
Given the investment horizon of 90 days Therasense is expected to under-perform the Oncology Pharma. But the pink sheet apears to be less risky and, when comparing its historical volatility, Therasense is 28.15 times less risky than Oncology Pharma. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Oncology Pharma is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Oncology Pharma on September 13, 2024 and sell it today you would earn a total of 0.01 from holding Oncology Pharma or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 92.06% |
Values | Daily Returns |
Therasense vs. Oncology Pharma
Performance |
Timeline |
Therasense |
Oncology Pharma |
Therasense and Oncology Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Therasense and Oncology Pharma
The main advantage of trading using opposite Therasense and Oncology Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Therasense position performs unexpectedly, Oncology Pharma 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 Oncology Pharma will offset losses from the drop in Oncology Pharma's long position.Therasense vs. GB Sciences | Therasense vs. Scisparc | Therasense vs. Creative Medical Technology | Therasense vs. Regen BioPharma |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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