Correlation Between BioAffinity Technologies and Bone Biologics

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

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

Diversification Opportunities for BioAffinity Technologies and Bone Biologics

0.68

Correlation Coefficient

BioAffinity Technologies  Bone Biologics

Poor diversification

The 3 months correlation between BioAffinity and Bone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding bioAffinity Technologies Warra and Bone Biologics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bone Biologics Corp and BioAffinity Technologies 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 bioAffinity Technologies Warrant are associated (or correlated) with Bone Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bone Biologics Corp has no effect on the direction of BioAffinity Technologies i.e., BioAffinity Technologies and Bone Biologics go up and down completely randomly.

Pair Corralation between BioAffinity Technologies and Bone Biologics

Assuming the 90 days horizon BioAffinity Technologies is expected to generate 7.24 times less return on investment than Bone Biologics. But when comparing it to its historical volatility, bioAffinity Technologies Warrant is 3.34 times less risky than Bone Biologics. It trades about 0.09 of its potential returns per unit of risk. Bone Biologics Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  71.00  in Bone Biologics Corp on October 5, 2024 and sell it today you would earn a total of  3,929  from holding Bone Biologics Corp or generate 5533.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	74.49%
Values	Daily Returns

bioAffinity Technologies Warra  vs.  Bone Biologics Corp

BioAffinity Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bioAffinity Technologies Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Bone Biologics Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bone Biologics Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Bone Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioAffinity Technologies and Bone Biologics

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

The idea behind bioAffinity Technologies Warrant and Bone Biologics 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.