Correlation Between Biofil Chemicals and Juniper Hotels

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

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

Diversification Opportunities for Biofil Chemicals and Juniper Hotels

0.63

Correlation Coefficient

Biofil Chemicals  Juniper Hotels

Poor diversification

The 3 months correlation between Biofil and Juniper is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Biofil Chemicals Pharmaceutica and Juniper Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Hotels and Biofil Chemicals 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 Biofil Chemicals Pharmaceuticals are associated (or correlated) with Juniper Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Hotels has no effect on the direction of Biofil Chemicals i.e., Biofil Chemicals and Juniper Hotels go up and down completely randomly.

Pair Corralation between Biofil Chemicals and Juniper Hotels

Assuming the 90 days trading horizon Biofil Chemicals Pharmaceuticals is expected to under-perform the Juniper Hotels. In addition to that, Biofil Chemicals is 1.05 times more volatile than Juniper Hotels. It trades about -0.07 of its total potential returns per unit of risk. Juniper Hotels is currently generating about -0.06 per unit of volatility. If you would invest  34,380  in Juniper Hotels on October 24, 2024 and sell it today you would lose (3,655) from holding Juniper Hotels or give up 10.63% of portfolio value over 90 days.

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

Biofil Chemicals Pharmaceutica  vs.  Juniper Hotels

Biofil Chemicals Pha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biofil Chemicals Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Juniper Hotels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Biofil Chemicals and Juniper Hotels

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

The idea behind Biofil Chemicals Pharmaceuticals and Juniper Hotels 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.