Correlation Between BioInvent International and Maha Energy

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

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

Diversification Opportunities for BioInvent International and Maha Energy

-0.33

Correlation Coefficient

BioInvent International  Maha Energy

Very good diversification

The 3 months correlation between BioInvent and Maha is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Maha Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Energy AB and BioInvent International 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 BioInvent International AB are associated (or correlated) with Maha Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Energy AB has no effect on the direction of BioInvent International i.e., BioInvent International and Maha Energy go up and down completely randomly.

Pair Corralation between BioInvent International and Maha Energy

Assuming the 90 days trading horizon BioInvent International is expected to generate 4.58 times less return on investment than Maha Energy. But when comparing it to its historical volatility, BioInvent International AB is 1.19 times less risky than Maha Energy. It trades about 0.01 of its potential returns per unit of risk. Maha Energy AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  687.00  in Maha Energy AB on October 8, 2024 and sell it today you would earn a total of  10.00  from holding Maha Energy AB or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BioInvent International AB  vs.  Maha Energy AB

BioInvent International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Maha Energy AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Energy AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical indicators, Maha Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioInvent International and Maha Energy

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

The idea behind BioInvent International AB and Maha Energy AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.