Correlation Between Health Sciences and Axim Biotechnologies

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

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

Diversification Opportunities for Health Sciences and Axim Biotechnologies

0.0

Correlation Coefficient

Health Sciences  Axim Biotechnologies

Pay attention - limited upside

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

Pair Corralation between Health Sciences and Axim Biotechnologies

If you would invest  0.70  in Axim Biotechnologies on September 13, 2024 and sell it today you would lose (0.50) from holding Axim Biotechnologies or give up 71.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Health Sciences Gr  vs.  Axim Biotechnologies

Health Sciences Gr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Health Sciences Gr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Health Sciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Axim Biotechnologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axim Biotechnologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Axim Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Health Sciences and Axim Biotechnologies

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

The idea behind Health Sciences Gr and Axim Biotechnologies 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.