Correlation Between Biopower Operations and BioCube

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

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

Diversification Opportunities for Biopower Operations and BioCube

1.0

Correlation Coefficient

Biopower Operations  BioCube

No risk reduction

The 3 months correlation between Biopower and BioCube is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Biopower Operations Corp and BioCube in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCube and Biopower Operations 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 Biopower Operations Corp are associated (or correlated) with BioCube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCube has no effect on the direction of Biopower Operations i.e., Biopower Operations and BioCube go up and down completely randomly.

Pair Corralation between Biopower Operations and BioCube

If you would invest  0.02  in BioCube on October 10, 2024 and sell it today you would earn a total of  0.00  from holding BioCube or generate 0.0% return on investment over 90 days.

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

Biopower Operations Corp  vs.  BioCube

Biopower Operations Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biopower Operations Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Biopower Operations is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

BioCube

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioCube has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, BioCube is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Biopower Operations and BioCube

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

The idea behind Biopower Operations Corp and BioCube 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.