Correlation Between Oncopeptides and Scibase AB

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

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

Diversification Opportunities for Oncopeptides and Scibase AB

0.83

Correlation Coefficient

Oncopeptides  Scibase AB

Very poor diversification

The 3 months correlation between Oncopeptides and Scibase is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Oncopeptides AB and Scibase AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scibase AB and Oncopeptides 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 Oncopeptides AB are associated (or correlated) with Scibase AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scibase AB has no effect on the direction of Oncopeptides i.e., Oncopeptides and Scibase AB go up and down completely randomly.

Pair Corralation between Oncopeptides and Scibase AB

Assuming the 90 days trading horizon Oncopeptides AB is expected to under-perform the Scibase AB. But the stock apears to be less risky and, when comparing its historical volatility, Oncopeptides AB is 1.91 times less risky than Scibase AB. The stock trades about -0.02 of its potential returns per unit of risk. The Scibase AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Scibase AB on September 27, 2024 and sell it today you would earn a total of  7.00  from holding Scibase AB or generate 20.0% return on investment over 90 days.

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

Oncopeptides AB  vs.  Scibase AB

Oncopeptides AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncopeptides AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Scibase AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scibase AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Oncopeptides and Scibase AB

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

The idea behind Oncopeptides AB and Scibase AB 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.