Correlation Between Oxford Cannabinoid and Pharming Group

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

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

Diversification Opportunities for Oxford Cannabinoid and Pharming Group

0.0

Correlation Coefficient

Oxford Cannabinoid  Pharming Group

Pay attention - limited upside

The 3 months correlation between Oxford and Pharming is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Cannabinoid Technologie and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group NV and Oxford Cannabinoid 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 Oxford Cannabinoid Technologies are associated (or correlated) with Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of Oxford Cannabinoid i.e., Oxford Cannabinoid and Pharming Group go up and down completely randomly.

Pair Corralation between Oxford Cannabinoid and Pharming Group

If you would invest  76.00  in Pharming Group NV on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Pharming Group NV or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Oxford Cannabinoid Technologie  vs.  Pharming Group NV

Oxford Cannabinoid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pharming Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Oxford Cannabinoid and Pharming Group

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

The idea behind Oxford Cannabinoid Technologies and Pharming Group NV 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.