Correlation Between OSE Pharma and Medesis Pharma

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

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

Diversification Opportunities for OSE Pharma and Medesis Pharma

-0.02

Correlation Coefficient

OSE Pharma  Medesis Pharma

Good diversification

The 3 months correlation between OSE and Medesis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding OSE Pharma SA and Medesis Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medesis Pharma SA and OSE Pharma 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 OSE Pharma SA are associated (or correlated) with Medesis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medesis Pharma SA has no effect on the direction of OSE Pharma i.e., OSE Pharma and Medesis Pharma go up and down completely randomly.

Pair Corralation between OSE Pharma and Medesis Pharma

Assuming the 90 days trading horizon OSE Pharma SA is expected to under-perform the Medesis Pharma. But the stock apears to be less risky and, when comparing its historical volatility, OSE Pharma SA is 1.28 times less risky than Medesis Pharma. The stock trades about -0.08 of its potential returns per unit of risk. The Medesis Pharma SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Medesis Pharma SA on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Medesis Pharma SA or generate 2.94% return on investment over 90 days.

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

OSE Pharma SA  vs.  Medesis Pharma SA

OSE Pharma SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days OSE Pharma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Medesis Pharma SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medesis Pharma SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Medesis Pharma may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with OSE Pharma and Medesis Pharma

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

The idea behind OSE Pharma SA and Medesis Pharma SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.