Correlation Between BioLineRx and Alx Oncology

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

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

Diversification Opportunities for BioLineRx and Alx Oncology

-0.61

Correlation Coefficient

BioLineRx  Alx Oncology

Excellent diversification

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

Pair Corralation between BioLineRx and Alx Oncology

Given the investment horizon of 90 days BioLineRx is expected to under-perform the Alx Oncology. In addition to that, BioLineRx is 2.55 times more volatile than Alx Oncology Holdings. It trades about -0.22 of its total potential returns per unit of risk. Alx Oncology Holdings is currently generating about -0.05 per unit of volatility. If you would invest  187.00  in Alx Oncology Holdings on October 23, 2024 and sell it today you would lose (13.00) from holding Alx Oncology Holdings or give up 6.95% of portfolio value over 90 days.

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

BioLineRx  vs.  Alx Oncology Holdings

BioLineRx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioLineRx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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.

Alx Oncology Holdings

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alx Oncology Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Alx Oncology displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioLineRx and Alx Oncology

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

The idea behind BioLineRx and Alx Oncology 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.