Correlation Between OPKO HEALTH and OPERA SOFTWARE

Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and OPERA SOFTWARE 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 OPKO HEALTH and OPERA SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OPKO HEALTH and OPERA SOFTWARE, you can compare the effects of market volatilities on OPKO HEALTH and OPERA SOFTWARE 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 OPKO HEALTH with a short position of OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and OPERA SOFTWARE.

Diversification Opportunities for OPKO HEALTH and OPERA SOFTWARE

-0.72

Correlation Coefficient

OPKO HEALTH  OPERA SOFTWARE

Pay attention - limited upside

The 3 months correlation between OPKO and OPERA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE and OPKO 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 OPKO HEALTH are associated (or correlated) with OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of OPKO HEALTH i.e., OPKO HEALTH and OPERA SOFTWARE go up and down completely randomly.

Pair Corralation between OPKO HEALTH and OPERA SOFTWARE

Assuming the 90 days trading horizon OPKO HEALTH is expected to under-perform the OPERA SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, OPKO HEALTH is 1.55 times less risky than OPERA SOFTWARE. The stock trades about -0.36 of its potential returns per unit of risk. The OPERA SOFTWARE is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  70.00  in OPERA SOFTWARE on March 26, 2025 and sell it today you would earn a total of  28.00  from holding OPERA SOFTWARE or generate 40.0% return on investment over 90 days.

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

OPKO HEALTH  vs.  OPERA SOFTWARE

OPKO HEALTH

Risk-Adjusted Performance

Very Weak

Over the last 90 days OPKO HEALTH 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 July 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

OPERA SOFTWARE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OPERA SOFTWARE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OPERA SOFTWARE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OPKO HEALTH and OPERA SOFTWARE

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

The idea behind OPKO HEALTH and OPERA SOFTWARE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.