Correlation Between Hypera SA and Biome Grow

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

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

Diversification Opportunities for Hypera SA and Biome Grow

0.11

Correlation Coefficient

Hypera SA  Biome Grow

Average diversification

The 3 months correlation between Hypera and Biome is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hypera SA and Biome Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biome Grow and Hypera SA 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 Hypera SA are associated (or correlated) with Biome Grow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biome Grow has no effect on the direction of Hypera SA i.e., Hypera SA and Biome Grow go up and down completely randomly.

Pair Corralation between Hypera SA and Biome Grow

Assuming the 90 days horizon Hypera SA is expected to under-perform the Biome Grow. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hypera SA is 5.72 times less risky than Biome Grow. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Biome Grow is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.38  in Biome Grow on October 4, 2024 and sell it today you would earn a total of  0.26  from holding Biome Grow or generate 68.42% return on investment over 90 days.

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

Hypera SA  vs.  Biome Grow

Hypera SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hypera SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Biome Grow

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biome Grow are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Biome Grow reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hypera SA and Biome Grow

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

The idea behind Hypera SA and Biome Grow 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .