Correlation Between IRLAB Therapeutics and Oncopeptides

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

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

Diversification Opportunities for IRLAB Therapeutics and Oncopeptides

-0.47

Correlation Coefficient

IRLAB Therapeutics  Oncopeptides

Very good diversification

The 3 months correlation between IRLAB and Oncopeptides is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding IRLAB Therapeutics AB and Oncopeptides AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncopeptides AB and IRLAB Therapeutics 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 IRLAB Therapeutics AB are associated (or correlated) with Oncopeptides. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncopeptides AB has no effect on the direction of IRLAB Therapeutics i.e., IRLAB Therapeutics and Oncopeptides go up and down completely randomly.

Pair Corralation between IRLAB Therapeutics and Oncopeptides

Assuming the 90 days trading horizon IRLAB Therapeutics AB is expected to under-perform the Oncopeptides. But the stock apears to be less risky and, when comparing its historical volatility, IRLAB Therapeutics AB is 1.67 times less risky than Oncopeptides. The stock trades about -0.16 of its potential returns per unit of risk. The Oncopeptides AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  197.00  in Oncopeptides AB on April 20, 2025 and sell it today you would earn a total of  144.00  from holding Oncopeptides AB or generate 73.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

IRLAB Therapeutics AB  vs.  Oncopeptides AB

IRLAB Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days IRLAB Therapeutics AB 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 basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Oncopeptides AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oncopeptides AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Oncopeptides unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IRLAB Therapeutics and Oncopeptides

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

The idea behind IRLAB Therapeutics AB and Oncopeptides 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.