Correlation Between Bioteque and Icares Medicus

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

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

Diversification Opportunities for Bioteque and Icares Medicus

0.36

Correlation Coefficient

Bioteque  Icares Medicus

Weak diversification

The 3 months correlation between Bioteque and Icares is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bioteque and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus and Bioteque 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 Bioteque are associated (or correlated) with Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Bioteque i.e., Bioteque and Icares Medicus go up and down completely randomly.

Pair Corralation between Bioteque and Icares Medicus

Assuming the 90 days trading horizon Bioteque is expected to generate 1.56 times less return on investment than Icares Medicus. But when comparing it to its historical volatility, Bioteque is 1.69 times less risky than Icares Medicus. It trades about 0.03 of its potential returns per unit of risk. Icares Medicus is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  12,350  in Icares Medicus on December 29, 2024 and sell it today you would earn a total of  250.00  from holding Icares Medicus or generate 2.02% return on investment over 90 days.

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

Bioteque  vs.  Icares Medicus

Bioteque

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bioteque are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Icares Medicus

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icares Medicus are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Icares Medicus 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 Bioteque and Icares Medicus

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

The idea behind Bioteque and Icares Medicus 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 Commodity Directory module to find actively traded commodities issued by global exchanges.