Correlation Between Biomerica and Dynatronics

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

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

Diversification Opportunities for Biomerica and Dynatronics

-0.29

Correlation Coefficient

Biomerica  Dynatronics

Very good diversification

The 3 months correlation between Biomerica and Dynatronics is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Biomerica and Dynatronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynatronics and Biomerica 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 Biomerica are associated (or correlated) with Dynatronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynatronics has no effect on the direction of Biomerica i.e., Biomerica and Dynatronics go up and down completely randomly.

Pair Corralation between Biomerica and Dynatronics

If you would invest  30.00  in Biomerica on October 24, 2024 and sell it today you would earn a total of  33.00  from holding Biomerica or generate 110.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Biomerica  vs.  Dynatronics

Biomerica

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biomerica sustained solid returns over the last few months and may actually be approaching a breakup point.

Dynatronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynatronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dynatronics is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Biomerica and Dynatronics

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

The idea behind Biomerica and Dynatronics 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.