Correlation Between LIFENET INSURANCE and Bio Techne

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

By analyzing existing cross correlation between LIFENET INSURANCE CO and Bio Techne Corp, you can compare the effects of market volatilities on LIFENET INSURANCE and Bio Techne 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 LIFENET INSURANCE with a short position of Bio Techne. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Bio Techne.

Diversification Opportunities for LIFENET INSURANCE and Bio Techne

-0.13

Correlation Coefficient

LIFENET INSURANCE  Bio Techne

Good diversification

The 3 months correlation between LIFENET and Bio is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Bio Techne Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne Corp and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne Corp has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Bio Techne go up and down completely randomly.

Pair Corralation between LIFENET INSURANCE and Bio Techne

Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 73.4 times less return on investment than Bio Techne. But when comparing it to its historical volatility, LIFENET INSURANCE CO is 1.03 times less risky than Bio Techne. It trades about 0.0 of its potential returns per unit of risk. Bio Techne Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  6,293  in Bio Techne Corp on October 25, 2024 and sell it today you would earn a total of  1,257  from holding Bio Techne Corp or generate 19.97% return on investment over 90 days.

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

LIFENET INSURANCE CO  vs.  Bio Techne Corp

LIFENET INSURANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFENET INSURANCE CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LIFENET INSURANCE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Bio Techne Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bio Techne unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LIFENET INSURANCE and Bio Techne

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

The idea behind LIFENET INSURANCE CO and Bio Techne Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.