Correlation Between Exmar NV and Biotalys

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

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

Diversification Opportunities for Exmar NV and Biotalys

0.14

Correlation Coefficient

Exmar NV  Biotalys

Average diversification

The 3 months correlation between Exmar and Biotalys is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and Biotalys NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotalys NV and Exmar NV 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 Exmar NV are associated (or correlated) with Biotalys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotalys NV has no effect on the direction of Exmar NV i.e., Exmar NV and Biotalys go up and down completely randomly.

Pair Corralation between Exmar NV and Biotalys

Assuming the 90 days trading horizon Exmar NV is expected to generate 14.7 times less return on investment than Biotalys. But when comparing it to its historical volatility, Exmar NV is 11.21 times less risky than Biotalys. It trades about 0.03 of its potential returns per unit of risk. Biotalys NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  324.00  in Biotalys NV on December 28, 2024 and sell it today you would earn a total of  22.00  from holding Biotalys NV or generate 6.79% return on investment over 90 days.

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

Exmar NV  vs.  Biotalys NV

Exmar NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Exmar NV is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Biotalys NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biotalys NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Biotalys may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Exmar NV and Biotalys

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

The idea behind Exmar NV and Biotalys NV 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.