Correlation Between Optima Health and MLP SE

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

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

Diversification Opportunities for Optima Health and MLP SE

0.66

Correlation Coefficient

Optima Health  MLP SE

Poor diversification

The 3 months correlation between Optima and MLP is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and MLP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MLP SE and Optima Health 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 Optima Health plc are associated (or correlated) with MLP SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MLP SE has no effect on the direction of Optima Health i.e., Optima Health and MLP SE go up and down completely randomly.

Pair Corralation between Optima Health and MLP SE

Assuming the 90 days trading horizon Optima Health is expected to generate 1.31 times less return on investment than MLP SE. But when comparing it to its historical volatility, Optima Health plc is 1.19 times less risky than MLP SE. It trades about 0.1 of its potential returns per unit of risk. MLP SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  749.00  in MLP SE on April 24, 2025 and sell it today you would earn a total of  119.00  from holding MLP SE or generate 15.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Optima Health plc  vs.  MLP SE

Optima Health plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Optima Health plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Optima Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MLP SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MLP SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MLP SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optima Health and MLP SE

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

The idea behind Optima Health plc and MLP SE 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.