Correlation Between Bioventix and LBG Media

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

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

Diversification Opportunities for Bioventix and LBG Media

-0.05

Correlation Coefficient

Bioventix  LBG Media

Good diversification

The 3 months correlation between Bioventix and LBG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bioventix and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Bioventix 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 Bioventix are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Bioventix i.e., Bioventix and LBG Media go up and down completely randomly.

Pair Corralation between Bioventix and LBG Media

Assuming the 90 days trading horizon Bioventix is expected to under-perform the LBG Media. But the stock apears to be less risky and, when comparing its historical volatility, Bioventix is 1.29 times less risky than LBG Media. The stock trades about -0.12 of its potential returns per unit of risk. The LBG Media PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  13,000  in LBG Media PLC on October 6, 2024 and sell it today you would earn a total of  300.00  from holding LBG Media PLC or generate 2.31% return on investment over 90 days.

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

Bioventix  vs.  LBG Media PLC

Bioventix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioventix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LBG Media PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LBG Media PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, LBG Media is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bioventix and LBG Media

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

The idea behind Bioventix and LBG Media PLC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.