Correlation Between Olink Holding and Natera

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

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

Diversification Opportunities for Olink Holding and Natera

0.75

Correlation Coefficient

Olink Holding  Natera

Poor diversification

The 3 months correlation between Olink and Natera is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Olink Holding AB and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and Olink Holding 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 Olink Holding AB are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Olink Holding i.e., Olink Holding and Natera go up and down completely randomly.

Pair Corralation between Olink Holding and Natera

If you would invest  10,610  in Natera Inc on July 24, 2024 and sell it today you would earn a total of  1,385  from holding Natera Inc or generate 13.05% return on investment over 90 days.

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

Olink Holding AB  vs.  Natera Inc

Olink Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Olink Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Olink Holding is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Natera Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Natera Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Natera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Olink Holding and Natera

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

The idea behind Olink Holding AB and Natera 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.