Correlation Between BioLine RX and Foresight Autonomous

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

By analyzing existing cross correlation between BioLine RX and Foresight Autonomous Holdings, you can compare the effects of market volatilities on BioLine RX and Foresight Autonomous 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 BioLine RX with a short position of Foresight Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLine RX and Foresight Autonomous.

Diversification Opportunities for BioLine RX and Foresight Autonomous

0.82

Correlation Coefficient

BioLine RX  Foresight Autonomous

Very poor diversification

The 3 months correlation between BioLine and Foresight is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BioLine RX and Foresight Autonomous Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Autonomous and BioLine RX 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 BioLine RX are associated (or correlated) with Foresight Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Autonomous has no effect on the direction of BioLine RX i.e., BioLine RX and Foresight Autonomous go up and down completely randomly.

Pair Corralation between BioLine RX and Foresight Autonomous

Assuming the 90 days trading horizon BioLine RX is expected to generate 1.38 times more return on investment than Foresight Autonomous. However, BioLine RX is 1.38 times more volatile than Foresight Autonomous Holdings. It trades about -0.08 of its potential returns per unit of risk. Foresight Autonomous Holdings is currently generating about -0.12 per unit of risk. If you would invest  3,410  in BioLine RX on September 12, 2024 and sell it today you would lose (2,700) from holding BioLine RX or give up 79.18% of portfolio value over 90 days.

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

BioLine RX  vs.  Foresight Autonomous Holdings

BioLine RX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioLine RX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Foresight Autonomous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foresight Autonomous Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BioLine RX and Foresight Autonomous

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

The idea behind BioLine RX and Foresight Autonomous Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.