Correlation Between ASPEN PHARUNADR and OptiNose

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

By analyzing existing cross correlation between ASPEN PHARUNADR 1 and OptiNose, you can compare the effects of market volatilities on ASPEN PHARUNADR and OptiNose 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 ASPEN PHARUNADR with a short position of OptiNose. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN PHARUNADR and OptiNose.

Diversification Opportunities for ASPEN PHARUNADR and OptiNose

0.5

Correlation Coefficient

ASPEN PHARUNADR  OptiNose

Very weak diversification

The 3 months correlation between ASPEN and OptiNose is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN PHARUNADR 1 and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and ASPEN PHARUNADR 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 ASPEN PHARUNADR 1 are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of ASPEN PHARUNADR i.e., ASPEN PHARUNADR and OptiNose go up and down completely randomly.

Pair Corralation between ASPEN PHARUNADR and OptiNose

Assuming the 90 days trading horizon ASPEN PHARUNADR 1 is expected to under-perform the OptiNose. But the stock apears to be less risky and, when comparing its historical volatility, ASPEN PHARUNADR 1 is 78.83 times less risky than OptiNose. The stock trades about -0.12 of its potential returns per unit of risk. The OptiNose is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  968.00  in OptiNose on October 6, 2024 and sell it today you would lose (930.00) from holding OptiNose or give up 96.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

ASPEN PHARUNADR 1  vs.  OptiNose

ASPEN PHARUNADR 1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASPEN PHARUNADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

OptiNose

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, OptiNose reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASPEN PHARUNADR and OptiNose

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

The idea behind ASPEN PHARUNADR 1 and OptiNose 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.