Correlation Between India Globalization and Biovaxys Technology

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

By analyzing existing cross correlation between India Globalization Capital and Biovaxys Technology Corp, you can compare the effects of market volatilities on India Globalization and Biovaxys Technology 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 India Globalization with a short position of Biovaxys Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of India Globalization and Biovaxys Technology.

Diversification Opportunities for India Globalization and Biovaxys Technology

0.06

Correlation Coefficient

India Globalization  Biovaxys Technology

Significant diversification

The 3 months correlation between India and Biovaxys is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding India Globalization Capital and Biovaxys Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovaxys Technology Corp and India Globalization 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 India Globalization Capital are associated (or correlated) with Biovaxys Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovaxys Technology Corp has no effect on the direction of India Globalization i.e., India Globalization and Biovaxys Technology go up and down completely randomly.

Pair Corralation between India Globalization and Biovaxys Technology

Considering the 90-day investment horizon India Globalization is expected to generate 6.76 times less return on investment than Biovaxys Technology. But when comparing it to its historical volatility, India Globalization Capital is 2.45 times less risky than Biovaxys Technology. It trades about 0.02 of its potential returns per unit of risk. Biovaxys Technology Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8.10  in Biovaxys Technology Corp on October 13, 2024 and sell it today you would lose (3.50) from holding Biovaxys Technology Corp or give up 43.21% of portfolio value over 90 days.

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

India Globalization Capital  vs.  Biovaxys Technology Corp

India Globalization

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days India Globalization Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, India Globalization is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Biovaxys Technology Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biovaxys Technology Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Biovaxys Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with India Globalization and Biovaxys Technology

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

The idea behind India Globalization Capital and Biovaxys Technology Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.