Correlation Between ELYM Old and Biotron

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

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

Diversification Opportunities for ELYM Old and Biotron

0.82

Correlation Coefficient

ELYM Old  Biotron

Very poor diversification

The 3 months correlation between ELYM and Biotron is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ELYM Old and Biotron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotron Limited and ELYM Old 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 ELYM Old are associated (or correlated) with Biotron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotron Limited has no effect on the direction of ELYM Old i.e., ELYM Old and Biotron go up and down completely randomly.

Pair Corralation between ELYM Old and Biotron

Given the investment horizon of 90 days ELYM Old is expected to generate 11.9 times less return on investment than Biotron. But when comparing it to its historical volatility, ELYM Old is 7.0 times less risky than Biotron. It trades about 0.03 of its potential returns per unit of risk. Biotron Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.07  in Biotron Limited on October 23, 2024 and sell it today you would lose (0.85) from holding Biotron Limited or give up 41.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.56%
Values	Daily Returns

ELYM Old  vs.  Biotron Limited

ELYM Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ELYM Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Biotron Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ELYM Old and Biotron

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

The idea behind ELYM Old and Biotron Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.