Correlation Between TaiMed Biologics and Panion BF

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

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

Diversification Opportunities for TaiMed Biologics and Panion BF

-0.05

Correlation Coefficient

TaiMed Biologics  Panion BF

Good diversification

The 3 months correlation between TaiMed and Panion is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding TaiMed Biologics and Panion BF Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panion BF Biotech and TaiMed Biologics 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 TaiMed Biologics are associated (or correlated) with Panion BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panion BF Biotech has no effect on the direction of TaiMed Biologics i.e., TaiMed Biologics and Panion BF go up and down completely randomly.

Pair Corralation between TaiMed Biologics and Panion BF

Assuming the 90 days trading horizon TaiMed Biologics is expected to generate 1.45 times more return on investment than Panion BF. However, TaiMed Biologics is 1.45 times more volatile than Panion BF Biotech. It trades about 0.05 of its potential returns per unit of risk. Panion BF Biotech is currently generating about -0.05 per unit of risk. If you would invest  7,940  in TaiMed Biologics on September 14, 2024 and sell it today you would earn a total of  360.00  from holding TaiMed Biologics or generate 4.53% return on investment over 90 days.

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

TaiMed Biologics  vs.  Panion BF Biotech

TaiMed Biologics

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TaiMed Biologics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, TaiMed Biologics is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Panion BF Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panion BF Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Panion BF 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 TaiMed Biologics and Panion BF

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

The idea behind TaiMed Biologics and Panion BF Biotech 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.