Correlation Between Flughafen Zuerich and Olema Pharmaceuticals

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Can any of the company-specific risk be diversified away by investing in both Flughafen Zuerich and Olema Pharmaceuticals 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 Flughafen Zuerich and Olema Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flughafen Zuerich Ag and Olema Pharmaceuticals, you can compare the effects of market volatilities on Flughafen Zuerich and Olema Pharmaceuticals 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 Flughafen Zuerich with a short position of Olema Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flughafen Zuerich and Olema Pharmaceuticals.

Diversification Opportunities for Flughafen Zuerich and Olema Pharmaceuticals

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Flughafen and Olema is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Flughafen Zuerich Ag and Olema Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olema Pharmaceuticals and Flughafen Zuerich 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 Flughafen Zuerich Ag are associated (or correlated) with Olema Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olema Pharmaceuticals has no effect on the direction of Flughafen Zuerich i.e., Flughafen Zuerich and Olema Pharmaceuticals go up and down completely randomly.

Pair Corralation between Flughafen Zuerich and Olema Pharmaceuticals

Assuming the 90 days horizon Flughafen Zuerich Ag is expected to generate 0.69 times more return on investment than Olema Pharmaceuticals. However, Flughafen Zuerich Ag is 1.44 times less risky than Olema Pharmaceuticals. It trades about 0.17 of its potential returns per unit of risk. Olema Pharmaceuticals is currently generating about -0.08 per unit of risk. If you would invest  15,135  in Flughafen Zuerich Ag on August 28, 2022 and sell it today you would earn a total of  2,095  from holding Flughafen Zuerich Ag or generate 13.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Flughafen Zuerich Ag  vs.  Olema Pharmaceuticals

 Performance (%) 
       Timeline  
Flughafen Zuerich 
Flughafen Performance
0 of 100
Over the last 90 days Flughafen Zuerich Ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Flughafen Zuerich is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Flughafen Price Channel

Olema Pharmaceuticals 
Olema Performance
0 of 100
Over the last 90 days Olema Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Olema Price Channel

Flughafen Zuerich and Olema Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flughafen Zuerich and Olema Pharmaceuticals

The main advantage of trading using opposite Flughafen Zuerich and Olema Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flughafen Zuerich position performs unexpectedly, Olema Pharmaceuticals 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 Olema Pharmaceuticals will offset losses from the drop in Olema Pharmaceuticals' long position.
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The idea behind Flughafen Zuerich Ag and Olema Pharmaceuticals 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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