Correlation Between Bionoid Pharma and BC Bud

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

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

Diversification Opportunities for Bionoid Pharma and BC Bud

0.84

Correlation Coefficient

Bionoid Pharma  BC Bud

Very poor diversification

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

Pair Corralation between Bionoid Pharma and BC Bud

Given the investment horizon of 90 days Bionoid Pharma is expected to under-perform the BC Bud. In addition to that, Bionoid Pharma is 1.37 times more volatile than The BC Bud. It trades about -0.08 of its total potential returns per unit of risk. The BC Bud is currently generating about -0.05 per unit of volatility. If you would invest  7.61  in The BC Bud on December 28, 2024 and sell it today you would lose (4.30) from holding The BC Bud or give up 56.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Bionoid Pharma  vs.  The BC Bud

Bionoid Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bionoid Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

BC Bud

Risk-Adjusted Performance

Very Weak

Over the last 90 days The BC Bud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bionoid Pharma and BC Bud

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

The idea behind Bionoid Pharma and The BC Bud 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.