Correlation Between Shionogi and Oasmia Pharmaceutical

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

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

Diversification Opportunities for Shionogi and Oasmia Pharmaceutical

0.39

Correlation Coefficient

Shionogi  Oasmia Pharmaceutical

Weak diversification

The 3 months correlation between Shionogi and Oasmia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shionogi Co Ltd and Oasmia Pharmaceutical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasmia Pharmaceutical and Shionogi 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 Shionogi Co Ltd are associated (or correlated) with Oasmia Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasmia Pharmaceutical has no effect on the direction of Shionogi i.e., Shionogi and Oasmia Pharmaceutical go up and down completely randomly.

Pair Corralation between Shionogi and Oasmia Pharmaceutical

If you would invest  6.00  in Oasmia Pharmaceutical AB on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Oasmia Pharmaceutical AB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Shionogi Co Ltd  vs.  Oasmia Pharmaceutical AB

Shionogi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shionogi Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Oasmia Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oasmia Pharmaceutical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Oasmia Pharmaceutical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shionogi and Oasmia Pharmaceutical

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

The idea behind Shionogi Co Ltd and Oasmia Pharmaceutical 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.