Correlation Between Oxford Nanopore and LIFE Old

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

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

Diversification Opportunities for Oxford Nanopore and LIFE Old

0.21

Correlation Coefficient

Oxford Nanopore  LIFE Old

Modest diversification

The 3 months correlation between Oxford and LIFE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Nanopore Technologies and LIFE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE Old and Oxford Nanopore 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 Oxford Nanopore Technologies are associated (or correlated) with LIFE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE Old has no effect on the direction of Oxford Nanopore i.e., Oxford Nanopore and LIFE Old go up and down completely randomly.

Pair Corralation between Oxford Nanopore and LIFE Old

Assuming the 90 days horizon Oxford Nanopore Technologies is expected to generate 0.64 times more return on investment than LIFE Old. However, Oxford Nanopore Technologies is 1.57 times less risky than LIFE Old. It trades about -0.01 of its potential returns per unit of risk. LIFE Old is currently generating about -0.04 per unit of risk. If you would invest  315.00  in Oxford Nanopore Technologies on October 11, 2024 and sell it today you would lose (151.00) from holding Oxford Nanopore Technologies or give up 47.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.71%
Values	Daily Returns

Oxford Nanopore Technologies  vs.  LIFE Old

Oxford Nanopore Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Nanopore Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

LIFE Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LIFE Old is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Nanopore and LIFE Old

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

The idea behind Oxford Nanopore Technologies and LIFE Old 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.