Correlation Between Co Diagnostics and Ocugen

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

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

Diversification Opportunities for Co Diagnostics and Ocugen

0.79

Correlation Coefficient

Co Diagnostics  Ocugen

Poor diversification

The 3 months correlation between CODX and Ocugen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Co Diagnostics and Ocugen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocugen Inc and Co Diagnostics 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 Co Diagnostics are associated (or correlated) with Ocugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocugen Inc has no effect on the direction of Co Diagnostics i.e., Co Diagnostics and Ocugen go up and down completely randomly.

Pair Corralation between Co Diagnostics and Ocugen

Given the investment horizon of 90 days Co Diagnostics is expected to under-perform the Ocugen. In addition to that, Co Diagnostics is 1.35 times more volatile than Ocugen Inc. It trades about -0.12 of its total potential returns per unit of risk. Ocugen Inc is currently generating about -0.02 per unit of volatility. If you would invest  81.00  in Ocugen Inc on December 28, 2024 and sell it today you would lose (9.00) from holding Ocugen Inc or give up 11.11% of portfolio value over 90 days.

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

Co Diagnostics  vs.  Ocugen Inc

Co Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Co Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ocugen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocugen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Ocugen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Co Diagnostics and Ocugen

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

The idea behind Co Diagnostics and Ocugen Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.