Correlation Between Amicus Therapeutics and Ocular Therapeutix

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

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

Diversification Opportunities for Amicus Therapeutics and Ocular Therapeutix

-0.09

Correlation Coefficient

Amicus Therapeutics  Ocular Therapeutix

Good diversification

The 3 months correlation between Amicus and Ocular is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics and Ocular Therapeutix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocular Therapeutix and Amicus Therapeutics 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 Amicus Therapeutics are associated (or correlated) with Ocular Therapeutix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocular Therapeutix has no effect on the direction of Amicus Therapeutics i.e., Amicus Therapeutics and Ocular Therapeutix go up and down completely randomly.

Pair Corralation between Amicus Therapeutics and Ocular Therapeutix

Given the investment horizon of 90 days Amicus Therapeutics is expected to under-perform the Ocular Therapeutix. But the stock apears to be less risky and, when comparing its historical volatility, Amicus Therapeutics is 2.35 times less risky than Ocular Therapeutix. The stock trades about -0.11 of its potential returns per unit of risk. The Ocular Therapeutix is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  854.00  in Ocular Therapeutix on December 25, 2024 and sell it today you would lose (111.00) from holding Ocular Therapeutix or give up 13.0% of portfolio value over 90 days.

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

Amicus Therapeutics  vs.  Ocular Therapeutix

Amicus Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amicus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Ocular Therapeutix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ocular Therapeutix has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Amicus Therapeutics and Ocular Therapeutix

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

The idea behind Amicus Therapeutics and Ocular Therapeutix 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.