Correlation Between KWESST Micro and OKYO Pharma
Can any of the company-specific risk be diversified away by investing in both KWESST Micro and OKYO 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 KWESST Micro and OKYO Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KWESST Micro Systems and OKYO Pharma Ltd, you can compare the effects of market volatilities on KWESST Micro and OKYO 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 KWESST Micro with a short position of OKYO Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of KWESST Micro and OKYO Pharma.
Diversification Opportunities for KWESST Micro and OKYO Pharma
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KWESST and OKYO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding KWESST Micro Systems and OKYO Pharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OKYO Pharma and KWESST Micro 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 KWESST Micro Systems are associated (or correlated) with OKYO Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OKYO Pharma has no effect on the direction of KWESST Micro i.e., KWESST Micro and OKYO Pharma go up and down completely randomly.
Pair Corralation between KWESST Micro and OKYO Pharma
Considering the 90-day investment horizon KWESST Micro Systems is expected to under-perform the OKYO Pharma. In addition to that, KWESST Micro is 2.34 times more volatile than OKYO Pharma Ltd. It trades about -0.03 of its total potential returns per unit of risk. OKYO Pharma Ltd is currently generating about -0.01 per unit of volatility. If you would invest 140.00 in OKYO Pharma Ltd on July 12, 2024 and sell it today you would lose (37.00) from holding OKYO Pharma Ltd or give up 26.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
KWESST Micro Systems vs. OKYO Pharma Ltd
Performance |
Timeline |
KWESST Micro Systems |
OKYO Pharma |
KWESST Micro and OKYO Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KWESST Micro and OKYO Pharma
The main advantage of trading using opposite KWESST Micro and OKYO Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWESST Micro position performs unexpectedly, OKYO 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 OKYO Pharma will offset losses from the drop in OKYO Pharma's long position.KWESST Micro vs. Ducommun Incorporated | KWESST Micro vs. Park Electrochemical | KWESST Micro vs. National Presto Industries | KWESST Micro vs. Woodward |
OKYO Pharma vs. Revolution Medicines | OKYO Pharma vs. Black Diamond Therapeutics | OKYO Pharma vs. Design Therapeutics | OKYO Pharma vs. Werewolf Therapeutics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |