Correlation Between Opthea and Freeline Therapeutics

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

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

Diversification Opportunities for Opthea and Freeline Therapeutics

0.0

Correlation Coefficient

Opthea  Freeline Therapeutics

Pay attention - limited upside

The 3 months correlation between Opthea and Freeline is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Opthea and Freeline Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeline Therapeutics and Opthea 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 Opthea are associated (or correlated) with Freeline Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeline Therapeutics has no effect on the direction of Opthea i.e., Opthea and Freeline Therapeutics go up and down completely randomly.

Pair Corralation between Opthea and Freeline Therapeutics

If you would invest  377.00  in Opthea on December 3, 2024 and sell it today you would earn a total of  134.00  from holding Opthea or generate 35.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Opthea  vs.  Freeline Therapeutics Holdings

Opthea

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Opthea are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Opthea unveiled solid returns over the last few months and may actually be approaching a breakup point.

Freeline Therapeutics

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Opthea and Freeline Therapeutics

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

The idea behind Opthea and Freeline Therapeutics Holdings 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 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.