Correlation Between BIO UV and VOGO SA

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

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

Diversification Opportunities for BIO UV and VOGO SA

-0.2

Correlation Coefficient

BIO UV  VOGO SA

Good diversification

The 3 months correlation between BIO and VOGO is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BIO UV Group and VOGO SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOGO SA and BIO UV 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 BIO UV Group are associated (or correlated) with VOGO SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOGO SA has no effect on the direction of BIO UV i.e., BIO UV and VOGO SA go up and down completely randomly.

Pair Corralation between BIO UV and VOGO SA

Assuming the 90 days trading horizon BIO UV Group is expected to generate 1.09 times more return on investment than VOGO SA. However, BIO UV is 1.09 times more volatile than VOGO SA. It trades about -0.01 of its potential returns per unit of risk. VOGO SA is currently generating about -0.04 per unit of risk. If you would invest  251.00  in BIO UV Group on October 3, 2024 and sell it today you would lose (31.00) from holding BIO UV Group or give up 12.35% of portfolio value over 90 days.

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

BIO UV Group  vs.  VOGO SA

BIO UV Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIO UV Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BIO UV may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VOGO SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOGO SA 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 BIO UV and VOGO SA

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

The idea behind BIO UV Group and VOGO SA 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.