Correlation Between Bonus Biogroup and Gencell

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

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

Diversification Opportunities for Bonus Biogroup and Gencell

0.6

Correlation Coefficient

Bonus Biogroup  Gencell

Poor diversification

The 3 months correlation between Bonus and Gencell is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bonus Biogroup and Gencell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencell and Bonus Biogroup 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 Bonus Biogroup are associated (or correlated) with Gencell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencell has no effect on the direction of Bonus Biogroup i.e., Bonus Biogroup and Gencell go up and down completely randomly.

Pair Corralation between Bonus Biogroup and Gencell

Assuming the 90 days trading horizon Bonus Biogroup is expected to under-perform the Gencell. But the stock apears to be less risky and, when comparing its historical volatility, Bonus Biogroup is 2.0 times less risky than Gencell. The stock trades about -0.2 of its potential returns per unit of risk. The Gencell is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5,850  in Gencell on September 11, 2024 and sell it today you would lose (10.00) from holding Gencell or give up 0.17% of portfolio value over 90 days.

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

Bonus Biogroup  vs.  Gencell

Bonus Biogroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonus Biogroup 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.

Gencell

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Bonus Biogroup and Gencell

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

The idea behind Bonus Biogroup and Gencell 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..