Correlation Between Intercure and BioLine RX

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

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

Diversification Opportunities for Intercure and BioLine RX

-0.51

Correlation Coefficient

Intercure  BioLine RX

Excellent diversification

The 3 months correlation between Intercure and BioLine is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and BioLine RX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLine RX and Intercure 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 Intercure are associated (or correlated) with BioLine RX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLine RX has no effect on the direction of Intercure i.e., Intercure and BioLine RX go up and down completely randomly.

Pair Corralation between Intercure and BioLine RX

Assuming the 90 days trading horizon Intercure is expected to generate 0.52 times more return on investment than BioLine RX. However, Intercure is 1.92 times less risky than BioLine RX. It trades about 0.09 of its potential returns per unit of risk. BioLine RX is currently generating about -0.27 per unit of risk. If you would invest  47,890  in Intercure on December 2, 2024 and sell it today you would earn a total of  8,110  from holding Intercure or generate 16.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intercure  vs.  BioLine RX

Intercure

Risk-Adjusted Performance

OK

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

BioLine RX

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioLine RX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Intercure and BioLine RX

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

The idea behind Intercure and BioLine RX 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.