Correlation Between OptiBiotix Health and Compass Group

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

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

Diversification Opportunities for OptiBiotix Health and Compass Group

0.35

Correlation Coefficient

OptiBiotix Health  Compass Group

Weak diversification

The 3 months correlation between OptiBiotix and Compass is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding OptiBiotix Health Plc and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC and OptiBiotix 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 OptiBiotix Health Plc are associated (or correlated) with Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of OptiBiotix Health i.e., OptiBiotix Health and Compass Group go up and down completely randomly.

Pair Corralation between OptiBiotix Health and Compass Group

Assuming the 90 days trading horizon OptiBiotix Health Plc is expected to under-perform the Compass Group. In addition to that, OptiBiotix Health is 2.93 times more volatile than Compass Group PLC. It trades about -0.01 of its total potential returns per unit of risk. Compass Group PLC is currently generating about 0.03 per unit of volatility. If you would invest  251,200  in Compass Group PLC on April 23, 2025 and sell it today you would earn a total of  1,200  from holding Compass Group PLC or generate 0.48% return on investment over 90 days.

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

OptiBiotix Health Plc  vs.  Compass Group PLC

OptiBiotix Health Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days OptiBiotix Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Compass Group PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Group PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Compass Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with OptiBiotix Health and Compass Group

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

The idea behind OptiBiotix Health Plc and Compass 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 Transaction History module to view history of all your transactions and understand their impact on performance.