Correlation Between HAVN Life and Oxford Nanopore

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

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

Diversification Opportunities for HAVN Life and Oxford Nanopore

-0.47

Correlation Coefficient

HAVN Life  Oxford Nanopore

Very good diversification

The 3 months correlation between HAVN and Oxford is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HAVN Life Sciences 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 HAVN Life 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 HAVN Life Sciences 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 HAVN Life i.e., HAVN Life and Oxford Nanopore go up and down completely randomly.

Pair Corralation between HAVN Life and Oxford Nanopore

Assuming the 90 days horizon HAVN Life Sciences is expected to generate 16.88 times more return on investment than Oxford Nanopore. However, HAVN Life is 16.88 times more volatile than Oxford Nanopore Technologies. It trades about 0.07 of its potential returns per unit of risk. Oxford Nanopore Technologies is currently generating about 0.1 per unit of risk. If you would invest  1.00  in HAVN Life Sciences on September 23, 2024 and sell it today you would lose (0.48) from holding HAVN Life Sciences or give up 48.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.22%
Values	Daily Returns

HAVN Life Sciences  vs.  Oxford Nanopore Technologies

HAVN Life Sciences

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HAVN Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, HAVN Life reported solid returns over the last few months and may actually be approaching a breakup point.

Oxford Nanopore Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Nanopore Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Oxford Nanopore is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HAVN Life and Oxford Nanopore

The main advantage of trading using opposite HAVN Life and Oxford Nanopore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAVN Life 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 HAVN Life Sciences 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..