Correlation Between Bioceres Crop and Draganfly

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

By analyzing existing cross correlation between Bioceres Crop Solutions and Draganfly, you can compare the effects of market volatilities on Bioceres Crop and Draganfly 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 Bioceres Crop with a short position of Draganfly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioceres Crop and Draganfly.

Diversification Opportunities for Bioceres Crop and Draganfly

0.61

Correlation Coefficient

Bioceres Crop  Draganfly

Poor diversification

The 3 months correlation between Bioceres and Draganfly is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bioceres Crop Solutions and Draganfly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draganfly and Bioceres Crop 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 Bioceres Crop Solutions are associated (or correlated) with Draganfly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draganfly has no effect on the direction of Bioceres Crop i.e., Bioceres Crop and Draganfly go up and down completely randomly.

Pair Corralation between Bioceres Crop and Draganfly

Given the investment horizon of 90 days Bioceres Crop Solutions is expected to generate 0.68 times more return on investment than Draganfly. However, Bioceres Crop Solutions is 1.47 times less risky than Draganfly. It trades about -0.04 of its potential returns per unit of risk. Draganfly is currently generating about -0.04 per unit of risk. If you would invest  604.00  in Bioceres Crop Solutions on December 29, 2024 and sell it today you would lose (120.00) from holding Bioceres Crop Solutions or give up 19.87% of portfolio value over 90 days.

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

Bioceres Crop Solutions  vs.  Draganfly

Bioceres Crop Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bioceres Crop Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Draganfly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Draganfly has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bioceres Crop and Draganfly

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

The idea behind Bioceres Crop Solutions and Draganfly 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.