Correlation Between OpGen and INVO Bioscience

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

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

Diversification Opportunities for OpGen and INVO Bioscience

0.11

Correlation Coefficient

OpGen  INVO Bioscience

Average diversification

The 3 months correlation between OpGen and INVO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding OpGen Inc and INVO Bioscience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVO Bioscience and OpGen 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 OpGen Inc are associated (or correlated) with INVO Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVO Bioscience has no effect on the direction of OpGen i.e., OpGen and INVO Bioscience go up and down completely randomly.

Pair Corralation between OpGen and INVO Bioscience

If you would invest  190.00  in OpGen Inc on September 24, 2024 and sell it today you would earn a total of  0.00  from holding OpGen Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	6.67%
Values	Daily Returns

OpGen Inc  vs.  INVO Bioscience

OpGen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

INVO Bioscience

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days INVO Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, INVO Bioscience displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OpGen and INVO Bioscience

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

The idea behind OpGen Inc and INVO Bioscience 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.