Correlation Between Excelsior Medical and Bioteque

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Can any of the company-specific risk be diversified away by investing in both Excelsior Medical 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 Excelsior Medical and Bioteque into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Medical Co and Bioteque, you can compare the effects of market volatilities on Excelsior Medical 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 Excelsior Medical with a short position of Bioteque. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Medical and Bioteque.

Diversification Opportunities for Excelsior Medical and Bioteque

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Excelsior and Bioteque is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and Bioteque in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioteque and Excelsior Medical 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 Excelsior Medical Co 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 Excelsior Medical i.e., Excelsior Medical and Bioteque go up and down completely randomly.

Pair Corralation between Excelsior Medical and Bioteque

Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 0.99 times more return on investment than Bioteque. However, Excelsior Medical Co is 1.01 times less risky than Bioteque. It trades about 0.05 of its potential returns per unit of risk. Bioteque is currently generating about 0.03 per unit of risk. If you would invest  6,800  in Excelsior Medical Co on September 24, 2024 and sell it today you would earn a total of  1,790  from holding Excelsior Medical Co or generate 26.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Excelsior Medical Co  vs.  Bioteque

 Performance 
       Timeline  
Excelsior Medical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Excelsior Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Excelsior Medical 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

 
Weak
 
Strong
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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Excelsior Medical and Bioteque Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Excelsior Medical and Bioteque

The main advantage of trading using opposite Excelsior Medical and Bioteque positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Medical 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 Excelsior Medical Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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