Correlation Between Antisense Therapeutics and BC Bud

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

By analyzing existing cross correlation between Antisense Therapeutics Limited and The BC Bud, you can compare the effects of market volatilities on Antisense Therapeutics and BC Bud 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 Antisense Therapeutics with a short position of BC Bud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antisense Therapeutics and BC Bud.

Diversification Opportunities for Antisense Therapeutics and BC Bud

-0.15

Correlation Coefficient

Antisense Therapeutics  BC Bud

Good diversification

The 3 months correlation between Antisense and BCBCF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Antisense Therapeutics Limited and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud and Antisense Therapeutics 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 Antisense Therapeutics Limited are associated (or correlated) with BC Bud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Bud has no effect on the direction of Antisense Therapeutics i.e., Antisense Therapeutics and BC Bud go up and down completely randomly.

Pair Corralation between Antisense Therapeutics and BC Bud

Assuming the 90 days horizon Antisense Therapeutics is expected to generate 2.02 times less return on investment than BC Bud. But when comparing it to its historical volatility, Antisense Therapeutics Limited is 1.47 times less risky than BC Bud. It trades about 0.12 of its potential returns per unit of risk. The BC Bud is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.88  in The BC Bud on September 12, 2024 and sell it today you would earn a total of  5.95  from holding The BC Bud or generate 676.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Antisense Therapeutics Limited  vs.  The BC Bud

Antisense Therapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antisense Therapeutics Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, Antisense Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

BC Bud

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The BC Bud are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, BC Bud reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Antisense Therapeutics and BC Bud

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

The idea behind Antisense Therapeutics Limited and The BC Bud 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.