Correlation Between Axim Biotechnologies and Biovaxys Technology

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

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

Diversification Opportunities for Axim Biotechnologies and Biovaxys Technology

0.51

Correlation Coefficient

Axim Biotechnologies  Biovaxys Technology

Very weak diversification

The 3 months correlation between Axim and Biovaxys is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Axim Biotechnologies and Biovaxys Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovaxys Technology Corp and Axim Biotechnologies 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 Axim Biotechnologies are associated (or correlated) with Biovaxys Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovaxys Technology Corp has no effect on the direction of Axim Biotechnologies i.e., Axim Biotechnologies and Biovaxys Technology go up and down completely randomly.

Pair Corralation between Axim Biotechnologies and Biovaxys Technology

Given the investment horizon of 90 days Axim Biotechnologies is expected to generate 3.34 times more return on investment than Biovaxys Technology. However, Axim Biotechnologies is 3.34 times more volatile than Biovaxys Technology Corp. It trades about 0.17 of its potential returns per unit of risk. Biovaxys Technology Corp is currently generating about -0.02 per unit of risk. If you would invest  0.20  in Axim Biotechnologies on October 26, 2024 and sell it today you would earn a total of  0.19  from holding Axim Biotechnologies or generate 95.0% return on investment over 90 days.

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

Axim Biotechnologies  vs.  Biovaxys Technology Corp

Axim Biotechnologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axim Biotechnologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Axim Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Biovaxys Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Axim Biotechnologies and Biovaxys Technology

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

The idea behind Axim Biotechnologies and Biovaxys Technology Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.