Correlation Between BioCube and Institute

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

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

Diversification Opportunities for BioCube and Institute

0.0

Correlation Coefficient

BioCube  Institute

Pay attention - limited upside

The 3 months correlation between BioCube and Institute is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BioCube and Institute of Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Institute of Biomedical and BioCube 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 BioCube are associated (or correlated) with Institute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Institute of Biomedical has no effect on the direction of BioCube i.e., BioCube and Institute go up and down completely randomly.

Pair Corralation between BioCube and Institute

If you would invest  1.45  in Institute of Biomedical on October 26, 2024 and sell it today you would earn a total of  1.25  from holding Institute of Biomedical or generate 86.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

BioCube  vs.  Institute of Biomedical

BioCube

Risk-Adjusted Performance

0 of 100

Very Weak

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

Institute of Biomedical

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Institute of Biomedical are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Institute unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioCube and Institute

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

The idea behind BioCube and Institute of Biomedical 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.