Correlation Between BioAdaptives and Premium Brands

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

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

Diversification Opportunities for BioAdaptives and Premium Brands

-0.84

Correlation Coefficient

BioAdaptives  Premium Brands

Pay attention - limited upside

The 3 months correlation between BioAdaptives and Premium is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BioAdaptives and Premium Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Brands Holdings and BioAdaptives 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 BioAdaptives are associated (or correlated) with Premium Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Brands Holdings has no effect on the direction of BioAdaptives i.e., BioAdaptives and Premium Brands go up and down completely randomly.

Pair Corralation between BioAdaptives and Premium Brands

Given the investment horizon of 90 days BioAdaptives is expected to generate 41.22 times more return on investment than Premium Brands. However, BioAdaptives is 41.22 times more volatile than Premium Brands Holdings. It trades about 0.11 of its potential returns per unit of risk. Premium Brands Holdings is currently generating about -0.04 per unit of risk. If you would invest  0.06  in BioAdaptives on September 28, 2024 and sell it today you would earn a total of  10.94  from holding BioAdaptives or generate 18233.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.64%
Values	Daily Returns

BioAdaptives  vs.  Premium Brands Holdings

BioAdaptives

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BioAdaptives are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, BioAdaptives unveiled solid returns over the last few months and may actually be approaching a breakup point.

Premium Brands Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premium Brands Holdings 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BioAdaptives and Premium Brands

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

The idea behind BioAdaptives and Premium Brands Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.