Correlation Between Optimi Health and TAAT Global

Can any of the company-specific risk be diversified away by investing in both Optimi Health and TAAT Global 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 TAAT Global 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 TAAT Global Alternatives, you can compare the effects of market volatilities on Optimi Health and TAAT Global 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 TAAT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimi Health and TAAT Global.

Diversification Opportunities for Optimi Health and TAAT Global

0.01

Correlation Coefficient

Optimi Health  TAAT Global

Significant diversification

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

Pair Corralation between Optimi Health and TAAT Global

Assuming the 90 days horizon Optimi Health is expected to generate 2.83 times less return on investment than TAAT Global. But when comparing it to its historical volatility, Optimi Health Corp is 1.91 times less risky than TAAT Global. It trades about 0.08 of its potential returns per unit of risk. TAAT Global Alternatives is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  11.00  in TAAT Global Alternatives on October 23, 2024 and sell it today you would earn a total of  2.00  from holding TAAT Global Alternatives or generate 18.18% return on investment over 90 days.

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

Optimi Health Corp  vs.  TAAT Global Alternatives

Optimi Health Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Optimi Health Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Optimi Health reported solid returns over the last few months and may actually be approaching a breakup point.

TAAT Global Alternatives

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TAAT Global Alternatives are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, TAAT Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optimi Health and TAAT Global

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

The idea behind Optimi Health Corp and TAAT Global Alternatives 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.