Correlation Between Oncolytics Biotech and Information Services

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

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

Diversification Opportunities for Oncolytics Biotech and Information Services

0.63

Correlation Coefficient

Oncolytics Biotech  Information Services

Poor diversification

The 3 months correlation between Oncolytics and Information is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Oncolytics Biotech and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services and Oncolytics Biotech 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 Oncolytics Biotech are associated (or correlated) with Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Oncolytics Biotech i.e., Oncolytics Biotech and Information Services go up and down completely randomly.

Pair Corralation between Oncolytics Biotech and Information Services

Assuming the 90 days trading horizon Oncolytics Biotech is expected to under-perform the Information Services. In addition to that, Oncolytics Biotech is 2.68 times more volatile than Information Services. It trades about -0.01 of its total potential returns per unit of risk. Information Services is currently generating about 0.04 per unit of volatility. If you would invest  2,056  in Information Services on October 24, 2024 and sell it today you would earn a total of  674.00  from holding Information Services or generate 32.78% return on investment over 90 days.

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

Oncolytics Biotech  vs.  Information Services

Oncolytics Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncolytics Biotech 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 fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Information Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Information Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Information Services is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Oncolytics Biotech and Information Services

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

The idea behind Oncolytics Biotech and Information Services 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.