Correlation Between Agios Pharm and OptiNose

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

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

Diversification Opportunities for Agios Pharm and OptiNose

-0.51

Correlation Coefficient

Agios Pharm  OptiNose

Excellent diversification

The 3 months correlation between Agios and OptiNose is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Agios Pharm and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Agios Pharm 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 Agios Pharm are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Agios Pharm i.e., Agios Pharm and OptiNose go up and down completely randomly.

Pair Corralation between Agios Pharm and OptiNose

Given the investment horizon of 90 days Agios Pharm is expected to generate 0.48 times more return on investment than OptiNose. However, Agios Pharm is 2.1 times less risky than OptiNose. It trades about 0.14 of its potential returns per unit of risk. OptiNose is currently generating about -0.13 per unit of risk. If you would invest  4,591  in Agios Pharm on August 30, 2024 and sell it today you would earn a total of  1,275  from holding Agios Pharm or generate 27.77% return on investment over 90 days.

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

Agios Pharm  vs.  OptiNose

Agios Pharm

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agios Pharm are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Agios Pharm displayed solid returns over the last few months and may actually be approaching a breakup point.

OptiNose

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Agios Pharm and OptiNose

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

The idea behind Agios Pharm and OptiNose 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.