Correlation Between Bioceres Crop and Enlightify

Can any of the company-specific risk be diversified away by investing in both Bioceres Crop and Enlightify 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 Enlightify 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 Enlightify, you can compare the effects of market volatilities on Bioceres Crop and Enlightify 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 Enlightify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioceres Crop and Enlightify.

Diversification Opportunities for Bioceres Crop and Enlightify

0.25

Correlation Coefficient

Bioceres Crop  Enlightify

Modest diversification

The 3 months correlation between Bioceres and Enlightify is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bioceres Crop Solutions and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify 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 Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of Bioceres Crop i.e., Bioceres Crop and Enlightify go up and down completely randomly.

Pair Corralation between Bioceres Crop and Enlightify

Given the investment horizon of 90 days Bioceres Crop Solutions is expected to generate 0.58 times more return on investment than Enlightify. However, Bioceres Crop Solutions is 1.73 times less risky than Enlightify. It trades about 0.02 of its potential returns per unit of risk. Enlightify is currently generating about -0.16 per unit of risk. If you would invest  700.00  in Bioceres Crop Solutions on October 25, 2024 and sell it today you would earn a total of  0.50  from holding Bioceres Crop Solutions or generate 0.07% return on investment over 90 days.

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

Bioceres Crop Solutions  vs.  Enlightify

Bioceres Crop Solutions

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bioceres Crop Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Bioceres Crop is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Enlightify

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bioceres Crop and Enlightify

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

The idea behind Bioceres Crop Solutions and Enlightify 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.