Correlation Between Biovaxys Technology and Kane Biotech

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

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

Diversification Opportunities for Biovaxys Technology and Kane Biotech

-0.24

Correlation Coefficient

Biovaxys Technology  Kane Biotech

Very good diversification

The 3 months correlation between Biovaxys and Kane is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Biovaxys Technology Corp and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech and Biovaxys Technology 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 Biovaxys Technology Corp are associated (or correlated) with Kane Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kane Biotech has no effect on the direction of Biovaxys Technology i.e., Biovaxys Technology and Kane Biotech go up and down completely randomly.

Pair Corralation between Biovaxys Technology and Kane Biotech

Assuming the 90 days horizon Biovaxys Technology Corp is expected to generate 1.31 times more return on investment than Kane Biotech. However, Biovaxys Technology is 1.31 times more volatile than Kane Biotech. It trades about 0.03 of its potential returns per unit of risk. Kane Biotech is currently generating about -0.08 per unit of risk. If you would invest  4.94  in Biovaxys Technology Corp on September 25, 2024 and sell it today you would lose (0.05) from holding Biovaxys Technology Corp or give up 1.01% of portfolio value over 90 days.

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

Biovaxys Technology Corp  vs.  Kane Biotech

Biovaxys Technology Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biovaxys Technology Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Biovaxys Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Kane Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Biovaxys Technology and Kane Biotech

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

The idea behind Biovaxys Technology Corp and Kane Biotech 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.