Correlation Between EirGenix and TaiMed Biologics

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

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

Diversification Opportunities for EirGenix and TaiMed Biologics

-0.23

Correlation Coefficient

EirGenix  TaiMed Biologics

Very good diversification

The 3 months correlation between EirGenix and TaiMed is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding EirGenix and TaiMed Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TaiMed Biologics and EirGenix 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 EirGenix are associated (or correlated) with TaiMed Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TaiMed Biologics has no effect on the direction of EirGenix i.e., EirGenix and TaiMed Biologics go up and down completely randomly.

Pair Corralation between EirGenix and TaiMed Biologics

Assuming the 90 days trading horizon EirGenix is expected to under-perform the TaiMed Biologics. In addition to that, EirGenix is 2.3 times more volatile than TaiMed Biologics. It trades about -0.27 of its total potential returns per unit of risk. TaiMed Biologics is currently generating about 0.12 per unit of volatility. If you would invest  8,500  in TaiMed Biologics on October 6, 2024 and sell it today you would earn a total of  330.00  from holding TaiMed Biologics or generate 3.88% return on investment over 90 days.

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

EirGenix  vs.  TaiMed Biologics

EirGenix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EirGenix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

TaiMed Biologics

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TaiMed Biologics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TaiMed Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EirGenix and TaiMed Biologics

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

The idea behind EirGenix and TaiMed Biologics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.