Correlation Between SciVision Biotech and Bioteque

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

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

Diversification Opportunities for SciVision Biotech and Bioteque

0.29

Correlation Coefficient

SciVision Biotech  Bioteque

Modest diversification

The 3 months correlation between SciVision and Bioteque is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SciVision Biotech and Bioteque in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioteque and SciVision Biotech 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 SciVision Biotech are associated (or correlated) with Bioteque. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioteque has no effect on the direction of SciVision Biotech i.e., SciVision Biotech and Bioteque go up and down completely randomly.

Pair Corralation between SciVision Biotech and Bioteque

Assuming the 90 days trading horizon SciVision Biotech is expected to generate 2.96 times more return on investment than Bioteque. However, SciVision Biotech is 2.96 times more volatile than Bioteque. It trades about 0.04 of its potential returns per unit of risk. Bioteque is currently generating about 0.01 per unit of risk. If you would invest  10,900  in SciVision Biotech on October 12, 2024 and sell it today you would earn a total of  400.00  from holding SciVision Biotech or generate 3.67% return on investment over 90 days.

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

SciVision Biotech  vs.  Bioteque

SciVision Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SciVision Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SciVision Biotech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bioteque

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioteque has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bioteque is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SciVision Biotech and Bioteque

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

The idea behind SciVision Biotech and Bioteque 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.