Correlation Between Oculis Holding and Marel Hf

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

By analyzing existing cross correlation between Oculis Holding AG and Marel hf, you can compare the effects of market volatilities on Oculis Holding and Marel Hf 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 Oculis Holding with a short position of Marel Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oculis Holding and Marel Hf.

Diversification Opportunities for Oculis Holding and Marel Hf

0.75

Correlation Coefficient

Oculis Holding  Marel Hf

Poor diversification

The 3 months correlation between Oculis and Marel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oculis Holding AG and Marel hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marel hf and Oculis Holding 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 Oculis Holding AG are associated (or correlated) with Marel Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marel hf has no effect on the direction of Oculis Holding i.e., Oculis Holding and Marel Hf go up and down completely randomly.

Pair Corralation between Oculis Holding and Marel Hf

Assuming the 90 days trading horizon Oculis Holding AG is expected to generate 2.24 times more return on investment than Marel Hf. However, Oculis Holding is 2.24 times more volatile than Marel hf. It trades about 0.19 of its potential returns per unit of risk. Marel hf is currently generating about 0.3 per unit of risk. If you would invest  166,000  in Oculis Holding AG on September 13, 2024 and sell it today you would earn a total of  64,000  from holding Oculis Holding AG or generate 38.55% return on investment over 90 days.

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

Oculis Holding AG  vs.  Marel hf

Oculis Holding AG

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oculis Holding AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Oculis Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Marel hf

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marel hf are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Marel Hf demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oculis Holding and Marel Hf

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

The idea behind Oculis Holding AG and Marel hf 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.