Correlation Between ABVC Biopharma and Bioatla

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

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

Diversification Opportunities for ABVC Biopharma and Bioatla

0.1

Correlation Coefficient

ABVC Biopharma  Bioatla

Average diversification

The 3 months correlation between ABVC and Bioatla is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ABVC Biopharma and Bioatla in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioatla and ABVC Biopharma 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 ABVC Biopharma are associated (or correlated) with Bioatla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioatla has no effect on the direction of ABVC Biopharma i.e., ABVC Biopharma and Bioatla go up and down completely randomly.

Pair Corralation between ABVC Biopharma and Bioatla

Given the investment horizon of 90 days ABVC Biopharma is expected to under-perform the Bioatla. In addition to that, ABVC Biopharma is 1.09 times more volatile than Bioatla. It trades about -0.03 of its total potential returns per unit of risk. Bioatla is currently generating about -0.02 per unit of volatility. If you would invest  360.00  in Bioatla on October 20, 2024 and sell it today you would lose (311.00) from holding Bioatla or give up 86.39% of portfolio value over 90 days.

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

ABVC Biopharma  vs.  Bioatla

ABVC Biopharma

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ABVC Biopharma are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ABVC Biopharma may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bioatla

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioatla has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ABVC Biopharma and Bioatla

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

The idea behind ABVC Biopharma and Bioatla 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.