Correlation Between Morpho and OBSR

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

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

Diversification Opportunities for Morpho and OBSR

0.05

Correlation Coefficient

Morpho  OBSR

Significant diversification

The 3 months correlation between Morpho and OBSR is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Morpho and OBSR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBSR and Morpho 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 Morpho are associated (or correlated) with OBSR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBSR has no effect on the direction of Morpho i.e., Morpho and OBSR go up and down completely randomly.

Pair Corralation between Morpho and OBSR

Assuming the 90 days trading horizon Morpho is expected to generate 2.0 times less return on investment than OBSR. But when comparing it to its historical volatility, Morpho is 3.31 times less risky than OBSR. It trades about 0.15 of its potential returns per unit of risk. OBSR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.28  in OBSR on April 24, 2025 and sell it today you would lose (0.04) from holding OBSR or give up 15.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Morpho  vs.  OBSR

Morpho

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Morpho sustained solid returns over the last few months and may actually be approaching a breakup point.

OBSR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OBSR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, OBSR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Morpho and OBSR

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

The idea behind Morpho and OBSR 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.