Correlation Between IBio, Common and ABVC Biopharma

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

By analyzing existing cross correlation between iBio, Common Stock and ABVC Biopharma, you can compare the effects of market volatilities on IBio, Common and ABVC Biopharma 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 IBio, Common with a short position of ABVC Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBio, Common and ABVC Biopharma.

Diversification Opportunities for IBio, Common and ABVC Biopharma

0.52

Correlation Coefficient

IBio, Common  ABVC Biopharma

Very weak diversification

The 3 months correlation between IBio, and ABVC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iBio, Common Stock and ABVC Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABVC Biopharma and IBio, Common 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 iBio, Common Stock are associated (or correlated) with ABVC Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABVC Biopharma has no effect on the direction of IBio, Common i.e., IBio, Common and ABVC Biopharma go up and down completely randomly.

Pair Corralation between IBio, Common and ABVC Biopharma

Given the investment horizon of 90 days iBio, Common Stock is expected to generate 1.17 times more return on investment than ABVC Biopharma. However, IBio, Common is 1.17 times more volatile than ABVC Biopharma. It trades about 0.21 of its potential returns per unit of risk. ABVC Biopharma is currently generating about 0.11 per unit of risk. If you would invest  240.00  in iBio, Common Stock on December 18, 2024 and sell it today you would earn a total of  268.00  from holding iBio, Common Stock or generate 111.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

iBio, Common Stock  vs.  ABVC Biopharma

iBio, Common Stock

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iBio, Common Stock are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, IBio, Common displayed solid returns over the last few months and may actually be approaching a breakup point.

ABVC Biopharma

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ABVC Biopharma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ABVC Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IBio, Common and ABVC Biopharma

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

The idea behind iBio, Common Stock and ABVC Biopharma 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.