Correlation Between TaiMed Biologics and SynCore Biotechnology

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

By analyzing existing cross correlation between TaiMed Biologics and SynCore Biotechnology Co, you can compare the effects of market volatilities on TaiMed Biologics and SynCore Biotechnology 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 SynCore Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TaiMed Biologics and SynCore Biotechnology.

Diversification Opportunities for TaiMed Biologics and SynCore Biotechnology

-0.51

Correlation Coefficient

TaiMed Biologics  SynCore Biotechnology

Excellent diversification

The 3 months correlation between TaiMed and SynCore is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding TaiMed Biologics and SynCore Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SynCore Biotechnology 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 SynCore Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SynCore Biotechnology has no effect on the direction of TaiMed Biologics i.e., TaiMed Biologics and SynCore Biotechnology go up and down completely randomly.

Pair Corralation between TaiMed Biologics and SynCore Biotechnology

Assuming the 90 days trading horizon TaiMed Biologics is expected to generate 1.45 times more return on investment than SynCore Biotechnology. However, TaiMed Biologics is 1.45 times more volatile than SynCore Biotechnology Co. It trades about 0.07 of its potential returns per unit of risk. SynCore Biotechnology Co is currently generating about -0.11 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  570.00  from holding TaiMed Biologics or generate 7.18% return on investment over 90 days.

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

TaiMed Biologics  vs.  SynCore Biotechnology Co

TaiMed Biologics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TaiMed Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TaiMed Biologics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SynCore Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SynCore Biotechnology Co 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.

Pair Trading with TaiMed Biologics and SynCore Biotechnology

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

The idea behind TaiMed Biologics and SynCore Biotechnology Co 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.