Correlation Between Opko Health and MediPress Health

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

By analyzing existing cross correlation between Opko Health and MediPress Health Limited Partnership, you can compare the effects of market volatilities on Opko Health and MediPress Health 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 MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Opko Health and MediPress Health.

Diversification Opportunities for Opko Health and MediPress Health

-0.47

Correlation Coefficient

Opko Health  MediPress Health

Very good diversification

The 3 months correlation between Opko and MediPress is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Opko Health and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim 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 MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Opko Health i.e., Opko Health and MediPress Health go up and down completely randomly.

Pair Corralation between Opko Health and MediPress Health

Assuming the 90 days trading horizon Opko Health is expected to generate 0.93 times more return on investment than MediPress Health. However, Opko Health is 1.07 times less risky than MediPress Health. It trades about 0.16 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about -0.05 per unit of risk. If you would invest  53,470  in Opko Health on December 30, 2024 and sell it today you would earn a total of  10,840  from holding Opko Health or generate 20.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.08%
Values	Daily Returns

Opko Health  vs.  MediPress Health Limited Partn

Opko Health

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Opko Health are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Opko Health sustained solid returns over the last few months and may actually be approaching a breakup point.

MediPress Health Lim

Risk-Adjusted Performance

Very Weak

Over the last 90 days MediPress Health Limited Partnership has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Opko Health and MediPress Health

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

The idea behind Opko Health and MediPress Health Limited Partnership 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.