Correlation Between Biotron and Curative Biotechnology

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

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

Diversification Opportunities for Biotron and Curative Biotechnology

-0.04

Correlation Coefficient

Biotron  Curative Biotechnology

Good diversification

The 3 months correlation between Biotron and Curative is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Biotron Limited and Curative Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curative Biotechnology and Biotron 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 Biotron Limited are associated (or correlated) with Curative Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curative Biotechnology has no effect on the direction of Biotron i.e., Biotron and Curative Biotechnology go up and down completely randomly.

Pair Corralation between Biotron and Curative Biotechnology

Assuming the 90 days horizon Biotron is expected to generate 4.69 times less return on investment than Curative Biotechnology. But when comparing it to its historical volatility, Biotron Limited is 3.95 times less risky than Curative Biotechnology. It trades about 0.13 of its potential returns per unit of risk. Curative Biotechnology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.81  in Curative Biotechnology on October 9, 2024 and sell it today you would earn a total of  0.25  from holding Curative Biotechnology or generate 30.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Biotron Limited  vs.  Curative Biotechnology

Biotron Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biotron Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Curative Biotechnology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Curative Biotechnology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Curative Biotechnology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biotron and Curative Biotechnology

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

The idea behind Biotron Limited and Curative Biotechnology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..