Correlation Between Bonus Biogroup and Nextgen

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

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

Diversification Opportunities for Bonus Biogroup and Nextgen

-0.09

Correlation Coefficient

Bonus Biogroup  Nextgen

Good diversification

The 3 months correlation between Bonus and Nextgen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bonus Biogroup and Nextgen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen 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 Nextgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen has no effect on the direction of Bonus Biogroup i.e., Bonus Biogroup and Nextgen go up and down completely randomly.

Pair Corralation between Bonus Biogroup and Nextgen

Assuming the 90 days trading horizon Bonus Biogroup is expected to generate 1.11 times more return on investment than Nextgen. However, Bonus Biogroup is 1.11 times more volatile than Nextgen. It trades about 0.16 of its potential returns per unit of risk. Nextgen is currently generating about 0.04 per unit of risk. If you would invest  1,090  in Bonus Biogroup on December 30, 2024 and sell it today you would earn a total of  650.00  from holding Bonus Biogroup or generate 59.63% return on investment over 90 days.

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

Bonus Biogroup  vs.  Nextgen

Bonus Biogroup

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bonus Biogroup are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bonus Biogroup sustained solid returns over the last few months and may actually be approaching a breakup point.

Nextgen

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Bonus Biogroup and Nextgen

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

The idea behind Bonus Biogroup and Nextgen 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.