Correlation Between Onyx Healthcare and First Copper

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

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

Diversification Opportunities for Onyx Healthcare and First Copper

0.49

Correlation Coefficient

Onyx Healthcare  First Copper

Very weak diversification

The 3 months correlation between Onyx and First is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Onyx Healthcare and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper Technology and Onyx Healthcare 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 Onyx Healthcare are associated (or correlated) with First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of Onyx Healthcare i.e., Onyx Healthcare and First Copper go up and down completely randomly.

Pair Corralation between Onyx Healthcare and First Copper

Assuming the 90 days trading horizon Onyx Healthcare is expected to generate 1.49 times more return on investment than First Copper. However, Onyx Healthcare is 1.49 times more volatile than First Copper Technology. It trades about 0.17 of its potential returns per unit of risk. First Copper Technology is currently generating about 0.02 per unit of risk. If you would invest  14,700  in Onyx Healthcare on October 20, 2024 and sell it today you would earn a total of  1,200  from holding Onyx Healthcare or generate 8.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Onyx Healthcare  vs.  First Copper Technology

Onyx Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onyx Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Onyx Healthcare is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Copper Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Copper Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Onyx Healthcare and First Copper

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

The idea behind Onyx Healthcare and First Copper Technology 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.