Correlation Between Bio Gene and Brambles

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

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

Diversification Opportunities for Bio Gene and Brambles

-0.5

Correlation Coefficient

Bio Gene  Brambles

Very good diversification

The 3 months correlation between Bio and Brambles is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Brambles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles and Bio Gene 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 Gene Technology are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles has no effect on the direction of Bio Gene i.e., Bio Gene and Brambles go up and down completely randomly.

Pair Corralation between Bio Gene and Brambles

Assuming the 90 days trading horizon Bio Gene Technology is expected to generate 10.2 times more return on investment than Brambles. However, Bio Gene is 10.2 times more volatile than Brambles. It trades about 0.01 of its potential returns per unit of risk. Brambles is currently generating about 0.12 per unit of risk. If you would invest  3.90  in Bio Gene Technology on December 23, 2024 and sell it today you would lose (0.60) from holding Bio Gene Technology or give up 15.38% of portfolio value over 90 days.

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

Bio Gene Technology  vs.  Brambles

Bio Gene Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Gene Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bio Gene may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Brambles

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brambles are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Brambles may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bio Gene and Brambles

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

The idea behind Bio Gene Technology and Brambles 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.