Correlation Between Oncolytics Biotech and McChip Resources

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

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

Diversification Opportunities for Oncolytics Biotech and McChip Resources

0.14

Correlation Coefficient

Oncolytics Biotech  McChip Resources

Average diversification

The 3 months correlation between Oncolytics and McChip is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Oncolytics Biotech and McChip Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McChip Resources 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 McChip Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McChip Resources has no effect on the direction of Oncolytics Biotech i.e., Oncolytics Biotech and McChip Resources go up and down completely randomly.

Pair Corralation between Oncolytics Biotech and McChip Resources

Assuming the 90 days trading horizon Oncolytics Biotech is expected to under-perform the McChip Resources. In addition to that, Oncolytics Biotech is 1.11 times more volatile than McChip Resources. It trades about -0.01 of its total potential returns per unit of risk. McChip Resources is currently generating about 0.02 per unit of volatility. If you would invest  74.00  in McChip Resources on October 27, 2024 and sell it today you would earn a total of  6.00  from holding McChip Resources or generate 8.11% return on investment over 90 days.

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

Oncolytics Biotech  vs.  McChip Resources

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.

McChip Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in McChip Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, McChip Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oncolytics Biotech and McChip Resources

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

The idea behind Oncolytics Biotech and McChip Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.