Correlation Between Pharma Mar and Oryzon Genomics

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

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

Diversification Opportunities for Pharma Mar and Oryzon Genomics

-0.88

Correlation Coefficient

Pharma Mar  Oryzon Genomics

Pay attention - limited upside

The 3 months correlation between Pharma and Oryzon is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pharma Mar SA and Oryzon Genomics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oryzon Genomics SA and Pharma Mar 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 Pharma Mar SA are associated (or correlated) with Oryzon Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oryzon Genomics SA has no effect on the direction of Pharma Mar i.e., Pharma Mar and Oryzon Genomics go up and down completely randomly.

Pair Corralation between Pharma Mar and Oryzon Genomics

Assuming the 90 days trading horizon Pharma Mar SA is expected to generate 1.65 times more return on investment than Oryzon Genomics. However, Pharma Mar is 1.65 times more volatile than Oryzon Genomics SA. It trades about -0.02 of its potential returns per unit of risk. Oryzon Genomics SA is currently generating about -0.18 per unit of risk. If you would invest  8,075  in Pharma Mar SA on September 12, 2024 and sell it today you would lose (190.00) from holding Pharma Mar SA or give up 2.35% of portfolio value over 90 days.

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

Pharma Mar SA  vs.  Oryzon Genomics SA

Pharma Mar SA

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pharma Mar SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Pharma Mar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oryzon Genomics SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oryzon Genomics SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Pharma Mar and Oryzon Genomics

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

The idea behind Pharma Mar SA and Oryzon Genomics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.