Correlation Between Grifols SA and Oryzon Genomics

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

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

Diversification Opportunities for Grifols SA and Oryzon Genomics

0.66

Correlation Coefficient

Grifols SA  Oryzon Genomics

Poor diversification

The 3 months correlation between Grifols and Oryzon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA and Oryzon Genomics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oryzon Genomics SA and Grifols SA 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 Grifols SA are associated (or correlated) with Oryzon Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oryzon Genomics SA has no effect on the direction of Grifols SA i.e., Grifols SA and Oryzon Genomics go up and down completely randomly.

Pair Corralation between Grifols SA and Oryzon Genomics

Assuming the 90 days trading horizon Grifols SA is expected to generate 20.7 times less return on investment than Oryzon Genomics. But when comparing it to its historical volatility, Grifols SA is 2.45 times less risky than Oryzon Genomics. It trades about 0.03 of its potential returns per unit of risk. Oryzon Genomics SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  152.00  in Oryzon Genomics SA on December 21, 2024 and sell it today you would earn a total of  171.00  from holding Oryzon Genomics SA or generate 112.5% return on investment over 90 days.

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

Grifols SA  vs.  Oryzon Genomics SA

Grifols SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grifols SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Grifols SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oryzon Genomics SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oryzon Genomics SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Oryzon Genomics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grifols SA and Oryzon Genomics

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

The idea behind Grifols SA and Oryzon Genomics SA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.