Correlation Between Bioharvest Sciences and BAB

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

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

Diversification Opportunities for Bioharvest Sciences and BAB

0.0

Correlation Coefficient

Bioharvest Sciences  BAB

Pay attention - limited upside

The 3 months correlation between Bioharvest and BAB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bioharvest Sciences and BAB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAB Inc and Bioharvest Sciences 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 Bioharvest Sciences are associated (or correlated) with BAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAB Inc has no effect on the direction of Bioharvest Sciences i.e., Bioharvest Sciences and BAB go up and down completely randomly.

Pair Corralation between Bioharvest Sciences and BAB

Assuming the 90 days horizon Bioharvest Sciences is expected to generate 9.5 times more return on investment than BAB. However, Bioharvest Sciences is 9.5 times more volatile than BAB Inc. It trades about 0.04 of its potential returns per unit of risk. BAB Inc is currently generating about 0.03 per unit of risk. If you would invest  754.00  in Bioharvest Sciences on October 25, 2024 and sell it today you would lose (199.00) from holding Bioharvest Sciences or give up 26.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.68%
Values	Daily Returns

Bioharvest Sciences  vs.  BAB Inc

Bioharvest Sciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bioharvest Sciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Bioharvest Sciences reported solid returns over the last few months and may actually be approaching a breakup point.

BAB Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BAB Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, BAB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bioharvest Sciences and BAB

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

The idea behind Bioharvest Sciences and BAB Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.