Correlation Between Ocean Biomedical and CohBar

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

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

Diversification Opportunities for Ocean Biomedical and CohBar

-0.53

Correlation Coefficient

Ocean Biomedical  CohBar

Excellent diversification

The 3 months correlation between Ocean and CohBar is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Biomedical and CohBar Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CohBar Inc and Ocean Biomedical 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 Ocean Biomedical are associated (or correlated) with CohBar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CohBar Inc has no effect on the direction of Ocean Biomedical i.e., Ocean Biomedical and CohBar go up and down completely randomly.

Pair Corralation between Ocean Biomedical and CohBar

Given the investment horizon of 90 days Ocean Biomedical is expected to generate 2.12 times more return on investment than CohBar. However, Ocean Biomedical is 2.12 times more volatile than CohBar Inc. It trades about 0.0 of its potential returns per unit of risk. CohBar Inc is currently generating about -0.16 per unit of risk. If you would invest  674.00  in Ocean Biomedical on August 15, 2024 and sell it today you would lose (600.00) from holding Ocean Biomedical or give up 89.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	11.56%
Values	Daily Returns

Ocean Biomedical  vs.  CohBar Inc

Ocean Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

CohBar Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CohBar Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, CohBar is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ocean Biomedical and CohBar

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

The idea behind Ocean Biomedical and CohBar Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.