Correlation Between OKYO Pharma and Nascent Biotech

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

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

Diversification Opportunities for OKYO Pharma and Nascent Biotech

-0.1

Correlation Coefficient

OKYO Pharma  Nascent Biotech

Good diversification

The 3 months correlation between OKYO and Nascent is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding OKYO Pharma Ltd and Nascent Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nascent Biotech and OKYO Pharma 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 OKYO Pharma Ltd are associated (or correlated) with Nascent Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nascent Biotech has no effect on the direction of OKYO Pharma i.e., OKYO Pharma and Nascent Biotech go up and down completely randomly.

Pair Corralation between OKYO Pharma and Nascent Biotech

Given the investment horizon of 90 days OKYO Pharma is expected to generate 25.33 times less return on investment than Nascent Biotech. But when comparing it to its historical volatility, OKYO Pharma Ltd is 20.43 times less risky than Nascent Biotech. It trades about 0.11 of its potential returns per unit of risk. Nascent Biotech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5.09  in Nascent Biotech on December 19, 2024 and sell it today you would lose (4.64) from holding Nascent Biotech or give up 91.16% of portfolio value over 90 days.

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

OKYO Pharma Ltd  vs.  Nascent Biotech

OKYO Pharma

Risk-Adjusted Performance

OK

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

Nascent Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nascent Biotech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Nascent Biotech displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OKYO Pharma and Nascent Biotech

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

The idea behind OKYO Pharma Ltd and Nascent Biotech 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 Commodity Directory module to find actively traded commodities issued by global exchanges.