Correlation Between Crossject and BIO UV

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

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

Diversification Opportunities for Crossject and BIO UV

0.76

Correlation Coefficient

Crossject  BIO UV

Poor diversification

The 3 months correlation between Crossject and BIO is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Crossject and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and Crossject 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 Crossject are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of Crossject i.e., Crossject and BIO UV go up and down completely randomly.

Pair Corralation between Crossject and BIO UV

Assuming the 90 days trading horizon Crossject is expected to generate 1.5 times more return on investment than BIO UV. However, Crossject is 1.5 times more volatile than BIO UV Group. It trades about -0.02 of its potential returns per unit of risk. BIO UV Group is currently generating about -0.08 per unit of risk. If you would invest  216.00  in Crossject on September 11, 2024 and sell it today you would lose (15.00) from holding Crossject or give up 6.94% of portfolio value over 90 days.

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

Crossject  vs.  BIO UV Group

Crossject

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crossject has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crossject is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

BIO UV Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BIO UV Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Crossject and BIO UV

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

The idea behind Crossject and BIO UV Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.