Correlation Between Olink Holding and IQVIA Holdings

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

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

Diversification Opportunities for Olink Holding and IQVIA Holdings

-0.87

Correlation Coefficient

Olink Holding  IQVIA Holdings

Pay attention - limited upside

The 3 months correlation between Olink and IQVIA is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Olink Holding AB and IQVIA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQVIA Holdings and Olink 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 Olink Holding AB are associated (or correlated) with IQVIA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQVIA Holdings has no effect on the direction of Olink Holding i.e., Olink Holding and IQVIA Holdings go up and down completely randomly.

Pair Corralation between Olink Holding and IQVIA Holdings

If you would invest  2,608  in Olink Holding AB on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Olink Holding AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	2.33%
Values	Daily Returns

Olink Holding AB  vs.  IQVIA Holdings

Olink Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olink Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Olink Holding is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Olink Holding and IQVIA Holdings

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

The idea behind Olink Holding AB and IQVIA Holdings 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 Channel module to use Commodity Channel Index to analyze current equity momentum.