Correlation Between Bionoid Pharma and Crescita Therapeutics

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

By analyzing existing cross correlation between Bionoid Pharma and Crescita Therapeutics, you can compare the effects of market volatilities on Bionoid Pharma and Crescita Therapeutics 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 Crescita Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bionoid Pharma and Crescita Therapeutics.

Diversification Opportunities for Bionoid Pharma and Crescita Therapeutics

0.11

Correlation Coefficient

Bionoid Pharma  Crescita Therapeutics

Average diversification

The 3 months correlation between Bionoid and Crescita is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bionoid Pharma and Crescita Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescita Therapeutics 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 Crescita Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescita Therapeutics has no effect on the direction of Bionoid Pharma i.e., Bionoid Pharma and Crescita Therapeutics go up and down completely randomly.

Pair Corralation between Bionoid Pharma and Crescita Therapeutics

If you would invest  10.00  in Bionoid Pharma on September 14, 2024 and sell it today you would earn a total of  17.00  from holding Bionoid Pharma or generate 170.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Bionoid Pharma  vs.  Crescita Therapeutics

Bionoid Pharma

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bionoid Pharma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Bionoid Pharma reported solid returns over the last few months and may actually be approaching a breakup point.

Crescita Therapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crescita Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Crescita Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bionoid Pharma and Crescita Therapeutics

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

The idea behind Bionoid Pharma and Crescita Therapeutics 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.