Correlation Between OptiCept Technologies and Norion Bank

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

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

Diversification Opportunities for OptiCept Technologies and Norion Bank

-0.45

Correlation Coefficient

OptiCept Technologies  Norion Bank

Very good diversification

The 3 months correlation between OptiCept and Norion is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding OptiCept Technologies AB and Norion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norion Bank and OptiCept Technologies 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 OptiCept Technologies AB are associated (or correlated) with Norion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norion Bank has no effect on the direction of OptiCept Technologies i.e., OptiCept Technologies and Norion Bank go up and down completely randomly.

Pair Corralation between OptiCept Technologies and Norion Bank

Assuming the 90 days trading horizon OptiCept Technologies is expected to generate 43.95 times less return on investment than Norion Bank. In addition to that, OptiCept Technologies is 1.7 times more volatile than Norion Bank. It trades about 0.01 of its total potential returns per unit of risk. Norion Bank is currently generating about 0.41 per unit of volatility. If you would invest  3,817  in Norion Bank on April 25, 2025 and sell it today you would earn a total of  2,183  from holding Norion Bank or generate 57.19% return on investment over 90 days.

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

OptiCept Technologies AB  vs.  Norion Bank

OptiCept Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days OptiCept Technologies AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, OptiCept Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Norion Bank

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Norion Bank are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Norion Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OptiCept Technologies and Norion Bank

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

The idea behind OptiCept Technologies AB and Norion Bank 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.