Correlation Between Armata Pharmaceuticals and Oxford Nanopore

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

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

Diversification Opportunities for Armata Pharmaceuticals and Oxford Nanopore

-0.02

Correlation Coefficient

Armata Pharmaceuticals  Oxford Nanopore

Good diversification

The 3 months correlation between Armata and Oxford is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and Oxford Nanopore Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Nanopore Tech and Armata Pharmaceuticals 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 Armata Pharmaceuticals are associated (or correlated) with Oxford Nanopore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Nanopore Tech has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and Oxford Nanopore go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and Oxford Nanopore

Given the investment horizon of 90 days Armata Pharmaceuticals is expected to generate 14.25 times less return on investment than Oxford Nanopore. But when comparing it to its historical volatility, Armata Pharmaceuticals is 1.2 times less risky than Oxford Nanopore. It trades about 0.01 of its potential returns per unit of risk. Oxford Nanopore Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  162.00  in Oxford Nanopore Technologies on August 31, 2024 and sell it today you would earn a total of  46.00  from holding Oxford Nanopore Technologies or generate 28.4% return on investment over 90 days.

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

Armata Pharmaceuticals  vs.  Oxford Nanopore Technologies

Armata Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armata Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Armata Pharmaceuticals is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Oxford Nanopore Tech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Nanopore Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Oxford Nanopore reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armata Pharmaceuticals and Oxford Nanopore

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

The idea behind Armata Pharmaceuticals and Oxford Nanopore Technologies 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.