Correlation Between Ocean Biomedical and OptiNose

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

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

Diversification Opportunities for Ocean Biomedical and OptiNose

-0.33

Correlation Coefficient

Ocean Biomedical  OptiNose

Very good diversification

The 3 months correlation between Ocean and OptiNose is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Biomedical and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Ocean Biomedical 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 Ocean Biomedical 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 Ocean Biomedical i.e., Ocean Biomedical and OptiNose go up and down completely randomly.

Pair Corralation between Ocean Biomedical and OptiNose

Assuming the 90 days horizon Ocean Biomedical is expected to generate 2.04 times less return on investment than OptiNose. In addition to that, Ocean Biomedical is 1.57 times more volatile than OptiNose. It trades about 0.03 of its total potential returns per unit of risk. OptiNose is currently generating about 0.11 per unit of volatility. If you would invest  627.00  in OptiNose on December 25, 2024 and sell it today you would earn a total of  290.00  from holding OptiNose or generate 46.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Ocean Biomedical  vs.  OptiNose

Ocean Biomedical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ocean Biomedical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ocean Biomedical showed solid returns over the last few months and may actually be approaching a breakup point.

OptiNose

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OptiNose are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, OptiNose displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocean Biomedical and OptiNose

The main advantage of trading using opposite Ocean Biomedical and OptiNose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Biomedical 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 Ocean Biomedical 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.