Correlation Between Bio Gene and Carindale Property

Can any of the company-specific risk be diversified away by investing in both Bio Gene and Carindale Property 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 Carindale Property 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 Carindale Property Trust, you can compare the effects of market volatilities on Bio Gene and Carindale Property 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 Carindale Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and Carindale Property.

Diversification Opportunities for Bio Gene and Carindale Property

-0.36

Correlation Coefficient

Bio Gene  Carindale Property

Very good diversification

The 3 months correlation between Bio and Carindale is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Carindale Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carindale Property Trust 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 Carindale Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carindale Property Trust has no effect on the direction of Bio Gene i.e., Bio Gene and Carindale Property go up and down completely randomly.

Pair Corralation between Bio Gene and Carindale Property

Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the Carindale Property. In addition to that, Bio Gene is 7.72 times more volatile than Carindale Property Trust. It trades about 0.0 of its total potential returns per unit of risk. Carindale Property Trust is currently generating about -0.01 per unit of volatility. If you would invest  477.00  in Carindale Property Trust on December 29, 2024 and sell it today you would lose (7.00) from holding Carindale Property Trust or give up 1.47% of portfolio value over 90 days.

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

Bio Gene Technology  vs.  Carindale Property Trust

Bio Gene Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Gene Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bio Gene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Carindale Property Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carindale Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Carindale Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bio Gene and Carindale Property

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

The idea behind Bio Gene Technology and Carindale Property Trust 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.