Correlation Between OpGen and ReShape Lifesciences

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

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

Diversification Opportunities for OpGen and ReShape Lifesciences

0.54

Correlation Coefficient

OpGen  ReShape Lifesciences

Very weak diversification

The 3 months correlation between OpGen and ReShape is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding OpGen Inc and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences 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 ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of OpGen i.e., OpGen and ReShape Lifesciences go up and down completely randomly.

Pair Corralation between OpGen and ReShape Lifesciences

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	Weak
Accuracy	4.76%
Values	Daily Returns

OpGen Inc  vs.  ReShape Lifesciences

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.

ReShape Lifesciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ReShape Lifesciences 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 essential 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.

Pair Trading with OpGen and ReShape Lifesciences

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

The idea behind OpGen Inc and ReShape Lifesciences 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.