Correlation Between BiOasis Technologies and LIFE Old

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

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

Diversification Opportunities for BiOasis Technologies and LIFE Old

-0.9

Correlation Coefficient

BiOasis Technologies  LIFE Old

Pay attention - limited upside

The 3 months correlation between BiOasis and LIFE is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding biOasis Technologies and LIFE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE Old and BiOasis 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 biOasis Technologies are associated (or correlated) with LIFE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE Old has no effect on the direction of BiOasis Technologies i.e., BiOasis Technologies and LIFE Old go up and down completely randomly.

Pair Corralation between BiOasis Technologies and LIFE Old

If you would invest  0.01  in biOasis Technologies on October 11, 2024 and sell it today you would earn a total of  0.01  from holding biOasis Technologies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

biOasis Technologies  vs.  LIFE Old

biOasis Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in biOasis Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BiOasis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

LIFE Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LIFE Old is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BiOasis Technologies and LIFE Old

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

The idea behind biOasis Technologies and LIFE Old 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.