Correlation Between Regenxbio and Opthea

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

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

Diversification Opportunities for Regenxbio and Opthea

-0.55

Correlation Coefficient

Regenxbio  Opthea

Excellent diversification

The 3 months correlation between Regenxbio and Opthea is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Regenxbio and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea and Regenxbio 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 Regenxbio are associated (or correlated) with Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of Regenxbio i.e., Regenxbio and Opthea go up and down completely randomly.

Pair Corralation between Regenxbio and Opthea

Given the investment horizon of 90 days Regenxbio is expected to generate 0.64 times more return on investment than Opthea. However, Regenxbio is 1.57 times less risky than Opthea. It trades about 0.05 of its potential returns per unit of risk. Opthea is currently generating about 0.0 per unit of risk. If you would invest  723.00  in Regenxbio on December 30, 2024 and sell it today you would earn a total of  60.00  from holding Regenxbio or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.48%
Values	Daily Returns

Regenxbio  vs.  Opthea

Regenxbio

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regenxbio are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Regenxbio showed solid returns over the last few months and may actually be approaching a breakup point.

Opthea

Risk-Adjusted Performance

Very Weak

Over the last 90 days Opthea has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Opthea is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Regenxbio and Opthea

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

The idea behind Regenxbio and Opthea 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.