Correlation Between Optima Health and Smarttech247 Group

Can any of the company-specific risk be diversified away by investing in both Optima Health and Smarttech247 Group 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 Smarttech247 Group 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 Smarttech247 Group PLC, you can compare the effects of market volatilities on Optima Health and Smarttech247 Group 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 Smarttech247 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Smarttech247 Group.

Diversification Opportunities for Optima Health and Smarttech247 Group

0.65

Correlation Coefficient

Optima Health  Smarttech247 Group

Poor diversification

The 3 months correlation between Optima and Smarttech247 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Smarttech247 Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smarttech247 Group PLC 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 Smarttech247 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smarttech247 Group PLC has no effect on the direction of Optima Health i.e., Optima Health and Smarttech247 Group go up and down completely randomly.

Pair Corralation between Optima Health and Smarttech247 Group

Assuming the 90 days trading horizon Optima Health is expected to generate 1.5 times less return on investment than Smarttech247 Group. But when comparing it to its historical volatility, Optima Health plc is 1.07 times less risky than Smarttech247 Group. It trades about 0.12 of its potential returns per unit of risk. Smarttech247 Group PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Smarttech247 Group PLC on April 24, 2025 and sell it today you would earn a total of  150.00  from holding Smarttech247 Group PLC or generate 23.08% return on investment over 90 days.

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

Optima Health plc  vs.  Smarttech247 Group PLC

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 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Optima Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Smarttech247 Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smarttech247 Group PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Smarttech247 Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optima Health and Smarttech247 Group

The main advantage of trading using opposite Optima Health and Smarttech247 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Smarttech247 Group 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 Smarttech247 Group will offset losses from the drop in Smarttech247 Group's long position.

The idea behind Optima Health plc and Smarttech247 Group PLC 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.