Correlation Between Carindale Property and Bio Gene

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

By analyzing existing cross correlation between Carindale Property Trust and Bio Gene Technology, you can compare the effects of market volatilities on Carindale Property and Bio Gene 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 Carindale Property with a short position of Bio Gene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carindale Property and Bio Gene.

Diversification Opportunities for Carindale Property and Bio Gene

-0.03

Correlation Coefficient

Carindale Property  Bio Gene

Good diversification

The 3 months correlation between Carindale and Bio is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Carindale Property Trust and Bio Gene Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Gene Technology and Carindale Property 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 Carindale Property Trust are associated (or correlated) with Bio Gene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Gene Technology has no effect on the direction of Carindale Property i.e., Carindale Property and Bio Gene go up and down completely randomly.

Pair Corralation between Carindale Property and Bio Gene

Assuming the 90 days trading horizon Carindale Property Trust is expected to generate 0.29 times more return on investment than Bio Gene. However, Carindale Property Trust is 3.41 times less risky than Bio Gene. It trades about 0.1 of its potential returns per unit of risk. Bio Gene Technology is currently generating about -0.02 per unit of risk. If you would invest  445.00  in Carindale Property Trust on September 14, 2024 and sell it today you would earn a total of  35.00  from holding Carindale Property Trust or generate 7.87% return on investment over 90 days.

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

Carindale Property Trust  vs.  Bio Gene Technology

Carindale Property Trust

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carindale Property Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Carindale Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bio Gene Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Gene Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bio Gene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Carindale Property and Bio Gene

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

The idea behind Carindale Property Trust and Bio Gene Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.