Correlation Between Akso Health and BioLife Solutions

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

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

Diversification Opportunities for Akso Health and BioLife Solutions

-0.04

Correlation Coefficient

Akso Health  BioLife Solutions

Good diversification

The 3 months correlation between Akso and BioLife is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Akso Health Group and BioLife Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLife Solutions and Akso Health 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 Akso Health Group are associated (or correlated) with BioLife Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLife Solutions has no effect on the direction of Akso Health i.e., Akso Health and BioLife Solutions go up and down completely randomly.

Pair Corralation between Akso Health and BioLife Solutions

Considering the 90-day investment horizon Akso Health Group is expected to generate 2.29 times more return on investment than BioLife Solutions. However, Akso Health is 2.29 times more volatile than BioLife Solutions. It trades about 0.06 of its potential returns per unit of risk. BioLife Solutions is currently generating about -0.01 per unit of risk. If you would invest  112.00  in Akso Health Group on December 27, 2024 and sell it today you would earn a total of  13.00  from holding Akso Health Group or generate 11.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Akso Health Group  vs.  BioLife Solutions

Akso Health Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Akso Health Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Akso Health reported solid returns over the last few months and may actually be approaching a breakup point.

BioLife Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioLife Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BioLife Solutions is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Akso Health and BioLife Solutions

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

The idea behind Akso Health Group and BioLife Solutions 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.