Correlation Between Bone Biologics and Biotricity

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

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

Diversification Opportunities for Bone Biologics and Biotricity

0.88

Correlation Coefficient

Bone Biologics  Biotricity

Very poor diversification

The 3 months correlation between Bone and Biotricity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and Biotricity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotricity and Bone Biologics 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 Bone Biologics Corp are associated (or correlated) with Biotricity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotricity has no effect on the direction of Bone Biologics i.e., Bone Biologics and Biotricity go up and down completely randomly.

Pair Corralation between Bone Biologics and Biotricity

Given the investment horizon of 90 days Bone Biologics Corp is expected to generate 1.05 times more return on investment than Biotricity. However, Bone Biologics is 1.05 times more volatile than Biotricity. It trades about -0.01 of its potential returns per unit of risk. Biotricity is currently generating about -0.08 per unit of risk. If you would invest  473.00  in Bone Biologics Corp on October 5, 2024 and sell it today you would lose (379.00) from holding Bone Biologics Corp or give up 80.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	58.87%
Values	Daily Returns

Bone Biologics Corp  vs.  Biotricity

Bone Biologics Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bone Biologics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential 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.

Biotricity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biotricity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Biotricity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bone Biologics and Biotricity

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

The idea behind Bone Biologics Corp and Biotricity 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.