Correlation Between PepGen and OptiNose

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

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

Diversification Opportunities for PepGen and OptiNose

0.74

Correlation Coefficient

PepGen  OptiNose

Poor diversification

The 3 months correlation between PepGen and OptiNose is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and PepGen 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 PepGen are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of PepGen i.e., PepGen and OptiNose go up and down completely randomly.

Pair Corralation between PepGen and OptiNose

Given the investment horizon of 90 days PepGen is expected to under-perform the OptiNose. But the stock apears to be less risky and, when comparing its historical volatility, PepGen is 1.32 times less risky than OptiNose. The stock trades about -0.19 of its potential returns per unit of risk. The OptiNose is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  104.00  in OptiNose on August 30, 2024 and sell it today you would lose (50.00) from holding OptiNose or give up 48.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

PepGen  vs.  OptiNose

PepGen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PepGen 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 basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

OptiNose

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PepGen and OptiNose

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

The idea behind PepGen and OptiNose 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.