Correlation Between Cresud SACIF and Bioelectronics Corp

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

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

Diversification Opportunities for Cresud SACIF and Bioelectronics Corp

0.09

Correlation Coefficient

Cresud SACIF  Bioelectronics Corp

Significant diversification

The 3 months correlation between Cresud and Bioelectronics is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Bioelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioelectronics Corp and Cresud SACIF 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 Cresud SACIF y are associated (or correlated) with Bioelectronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioelectronics Corp has no effect on the direction of Cresud SACIF i.e., Cresud SACIF and Bioelectronics Corp go up and down completely randomly.

Pair Corralation between Cresud SACIF and Bioelectronics Corp

Assuming the 90 days horizon Cresud SACIF is expected to generate 23.88 times less return on investment than Bioelectronics Corp. But when comparing it to its historical volatility, Cresud SACIF y is 13.5 times less risky than Bioelectronics Corp. It trades about 0.08 of its potential returns per unit of risk. Bioelectronics Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Bioelectronics Corp on October 5, 2024 and sell it today you would lose (0.01) from holding Bioelectronics Corp or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Cresud SACIF y  vs.  Bioelectronics Corp

Cresud SACIF y

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cresud SACIF y are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Cresud SACIF showed solid returns over the last few months and may actually be approaching a breakup point.

Bioelectronics Corp

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Cresud SACIF and Bioelectronics Corp

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

The idea behind Cresud SACIF y and Bioelectronics Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.