Correlation Between Optima Health and Abrdn Property

Can any of the company-specific risk be diversified away by investing in both Optima Health and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on Optima Health and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Abrdn Property.

Diversification Opportunities for Optima Health and Abrdn Property

-0.61

Correlation Coefficient

Optima Health  Abrdn Property

Excellent diversification

The 3 months correlation between Optima and Abrdn is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Optima Health i.e., Optima Health and Abrdn Property go up and down completely randomly.

Pair Corralation between Optima Health and Abrdn Property

Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.69 times more return on investment than Abrdn Property. However, Optima Health plc is 1.44 times less risky than Abrdn Property. It trades about 0.09 of its potential returns per unit of risk. abrdn Property Income is currently generating about -0.07 per unit of risk. If you would invest  17,800  in Optima Health plc on April 20, 2025 and sell it today you would earn a total of  1,650  from holding Optima Health plc or generate 9.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Optima Health plc  vs.  abrdn Property Income

Optima Health plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Optima Health plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Optima Health may actually be approaching a critical reversion point that can send shares even higher in August 2025.

abrdn Property Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days abrdn Property Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Optima Health and Abrdn Property

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

The idea behind Optima Health plc and abrdn Property Income 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.