Correlation Between Optimi Health and Draganfly

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

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

Diversification Opportunities for Optimi Health and Draganfly

-0.24

Correlation Coefficient

Optimi Health  Draganfly

Very good diversification

The 3 months correlation between Optimi and Draganfly is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Optimi Health Corp and Draganfly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draganfly and Optimi 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 Optimi Health Corp are associated (or correlated) with Draganfly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draganfly has no effect on the direction of Optimi Health i.e., Optimi Health and Draganfly go up and down completely randomly.

Pair Corralation between Optimi Health and Draganfly

Assuming the 90 days horizon Optimi Health Corp is expected to generate 0.9 times more return on investment than Draganfly. However, Optimi Health Corp is 1.11 times less risky than Draganfly. It trades about 0.03 of its potential returns per unit of risk. Draganfly is currently generating about 0.0 per unit of risk. If you would invest  18.00  in Optimi Health Corp on September 18, 2024 and sell it today you would lose (2.00) from holding Optimi Health Corp or give up 11.11% of portfolio value over 90 days.

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

Optimi Health Corp  vs.  Draganfly

Optimi Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optimi Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Draganfly

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Draganfly are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Draganfly displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optimi Health and Draganfly

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

The idea behind Optimi Health Corp and Draganfly 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.