Correlation Between Opko Health and Altshuler Shaham

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

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

Diversification Opportunities for Opko Health and Altshuler Shaham

0.07

Correlation Coefficient

Opko Health  Altshuler Shaham

Significant diversification

The 3 months correlation between Opko and Altshuler is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and Altshuler Shaham Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altshuler Shaham Fin and Opko Health 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 Opko Health are associated (or correlated) with Altshuler Shaham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altshuler Shaham Fin has no effect on the direction of Opko Health i.e., Opko Health and Altshuler Shaham go up and down completely randomly.

Pair Corralation between Opko Health and Altshuler Shaham

Assuming the 90 days trading horizon Opko Health is expected to generate 1.68 times more return on investment than Altshuler Shaham. However, Opko Health is 1.68 times more volatile than Altshuler Shaham Financial. It trades about 0.01 of its potential returns per unit of risk. Altshuler Shaham Financial is currently generating about 0.01 per unit of risk. If you would invest  53,580  in Opko Health on October 25, 2024 and sell it today you would lose (780.00) from holding Opko Health or give up 1.46% of portfolio value over 90 days.

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

Opko Health  vs.  Altshuler Shaham Financial

Opko Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Opko Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Opko Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Altshuler Shaham Fin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altshuler Shaham Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altshuler Shaham is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Opko Health and Altshuler Shaham

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

The idea behind Opko Health and Altshuler Shaham Financial 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.