Correlation Between Opthea and Exagen

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

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

Diversification Opportunities for Opthea and Exagen

0.01

Correlation Coefficient

Opthea  Exagen

Significant diversification

The 3 months correlation between Opthea and Exagen is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Opthea and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc 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 Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of Opthea i.e., Opthea and Exagen go up and down completely randomly.

Pair Corralation between Opthea and Exagen

Considering the 90-day investment horizon Opthea is expected to generate 0.48 times more return on investment than Exagen. However, Opthea is 2.09 times less risky than Exagen. It trades about 0.14 of its potential returns per unit of risk. Exagen Inc is currently generating about 0.01 per unit of risk. If you would invest  369.00  in Opthea on November 28, 2024 and sell it today you would earn a total of  121.00  from holding Opthea or generate 32.79% return on investment over 90 days.

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

Opthea  vs.  Exagen Inc

Opthea

Risk-Adjusted Performance

OK

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.

Exagen Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Opthea and Exagen

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

The idea behind Opthea and Exagen Inc 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.