Correlation Between Crescita Therapeutics and Bionoid Pharma

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

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

Diversification Opportunities for Crescita Therapeutics and Bionoid Pharma

0.42

Correlation Coefficient

Crescita Therapeutics  Bionoid Pharma

Very weak diversification

The 3 months correlation between Crescita and Bionoid is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Crescita Therapeutics and Bionoid Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionoid Pharma and Crescita Therapeutics 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 Crescita Therapeutics are associated (or correlated) with Bionoid Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionoid Pharma has no effect on the direction of Crescita Therapeutics i.e., Crescita Therapeutics and Bionoid Pharma go up and down completely randomly.

Pair Corralation between Crescita Therapeutics and Bionoid Pharma

Assuming the 90 days horizon Crescita Therapeutics is expected to generate 0.1 times more return on investment than Bionoid Pharma. However, Crescita Therapeutics is 10.44 times less risky than Bionoid Pharma. It trades about -0.13 of its potential returns per unit of risk. Bionoid Pharma is currently generating about -0.1 per unit of risk. If you would invest  45.00  in Crescita Therapeutics on December 29, 2024 and sell it today you would lose (6.00) from holding Crescita Therapeutics or give up 13.33% of portfolio value over 90 days.

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

Crescita Therapeutics  vs.  Bionoid Pharma

Crescita Therapeutics

Risk-Adjusted Performance

Very Weak

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

Bionoid Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bionoid Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Crescita Therapeutics and Bionoid Pharma

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

The idea behind Crescita Therapeutics and Bionoid Pharma 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.