Correlation Between Ocular Therapeutix and Biote Corp

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

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

Diversification Opportunities for Ocular Therapeutix and Biote Corp

-0.39

Correlation Coefficient

Ocular Therapeutix  Biote Corp

Very good diversification

The 3 months correlation between Ocular and Biote is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ocular Therapeutix and biote Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biote Corp and Ocular Therapeutix 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 Ocular Therapeutix are associated (or correlated) with Biote Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biote Corp has no effect on the direction of Ocular Therapeutix i.e., Ocular Therapeutix and Biote Corp go up and down completely randomly.

Pair Corralation between Ocular Therapeutix and Biote Corp

Given the investment horizon of 90 days Ocular Therapeutix is expected to generate 1.27 times more return on investment than Biote Corp. However, Ocular Therapeutix is 1.27 times more volatile than biote Corp. It trades about 0.05 of its potential returns per unit of risk. biote Corp is currently generating about 0.03 per unit of risk. If you would invest  387.00  in Ocular Therapeutix on October 23, 2024 and sell it today you would earn a total of  414.00  from holding Ocular Therapeutix or generate 106.98% return on investment over 90 days.

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

Ocular Therapeutix  vs.  biote Corp

Ocular Therapeutix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocular Therapeutix 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 quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

biote Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in biote Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Biote Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocular Therapeutix and Biote Corp

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

The idea behind Ocular Therapeutix and biote Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.