Correlation Between Protalix Biotherapeutics and Ocuphire Pharma

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

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

Diversification Opportunities for Protalix Biotherapeutics and Ocuphire Pharma

-0.37

Correlation Coefficient

Protalix Biotherapeutics  Ocuphire Pharma

Very good diversification

The 3 months correlation between Protalix and Ocuphire is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Protalix Biotherapeutics and Ocuphire Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocuphire Pharma and Protalix Biotherapeutics 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 Protalix Biotherapeutics are associated (or correlated) with Ocuphire Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocuphire Pharma has no effect on the direction of Protalix Biotherapeutics i.e., Protalix Biotherapeutics and Ocuphire Pharma go up and down completely randomly.

Pair Corralation between Protalix Biotherapeutics and Ocuphire Pharma

Considering the 90-day investment horizon Protalix Biotherapeutics is expected to generate 1.14 times more return on investment than Ocuphire Pharma. However, Protalix Biotherapeutics is 1.14 times more volatile than Ocuphire Pharma. It trades about 0.19 of its potential returns per unit of risk. Ocuphire Pharma is currently generating about -0.05 per unit of risk. If you would invest  102.00  in Protalix Biotherapeutics on September 5, 2024 and sell it today you would earn a total of  62.00  from holding Protalix Biotherapeutics or generate 60.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

Protalix Biotherapeutics  vs.  Ocuphire Pharma

Protalix Biotherapeutics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Protalix Biotherapeutics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Protalix Biotherapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Ocuphire Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocuphire Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Protalix Biotherapeutics and Ocuphire Pharma

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

The idea behind Protalix Biotherapeutics and Ocuphire Pharma 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.