Correlation Between Scibase AB and Oncopeptides

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

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

Diversification Opportunities for Scibase AB and Oncopeptides

0.83

Correlation Coefficient

Scibase AB  Oncopeptides

Very poor diversification

The 3 months correlation between Scibase and Oncopeptides is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Scibase AB and Oncopeptides AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncopeptides AB and Scibase AB 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 Scibase AB are associated (or correlated) with Oncopeptides. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncopeptides AB has no effect on the direction of Scibase AB i.e., Scibase AB and Oncopeptides go up and down completely randomly.

Pair Corralation between Scibase AB and Oncopeptides

Assuming the 90 days trading horizon Scibase AB is expected to generate 1.91 times more return on investment than Oncopeptides. However, Scibase AB is 1.91 times more volatile than Oncopeptides AB. It trades about 0.18 of its potential returns per unit of risk. Oncopeptides AB is currently generating about -0.02 per unit of risk. If you would invest  35.00  in Scibase AB on September 27, 2024 and sell it today you would earn a total of  7.00  from holding Scibase AB or generate 20.0% return on investment over 90 days.

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

Scibase AB  vs.  Oncopeptides AB

Scibase AB

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Scibase AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Oncopeptides AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oncopeptides AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Scibase AB and Oncopeptides

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

The idea behind Scibase AB and Oncopeptides AB 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.