Correlation Between Integrated Biopharma and BAB

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

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

Diversification Opportunities for Integrated Biopharma and BAB

-0.5

Correlation Coefficient

Integrated Biopharma  BAB

Very good diversification

The 3 months correlation between Integrated and BAB is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Biopharma and BAB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAB Inc and Integrated Biopharma 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 Integrated Biopharma are associated (or correlated) with BAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAB Inc has no effect on the direction of Integrated Biopharma i.e., Integrated Biopharma and BAB go up and down completely randomly.

Pair Corralation between Integrated Biopharma and BAB

If you would invest  33.00  in Integrated Biopharma on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Integrated Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Integrated Biopharma  vs.  BAB Inc

Integrated Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Integrated Biopharma is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

BAB Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BAB Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, BAB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Integrated Biopharma and BAB

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

The idea behind Integrated Biopharma and BAB Inc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.