Correlation Between Kane Biotech and Biovaxys Technology

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

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

Diversification Opportunities for Kane Biotech and Biovaxys Technology

-0.24

Correlation Coefficient

Kane Biotech  Biovaxys Technology

Very good diversification

The 3 months correlation between Kane and Biovaxys is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kane Biotech 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 Kane Biotech 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 Kane Biotech 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 Kane Biotech i.e., Kane Biotech and Biovaxys Technology go up and down completely randomly.

Pair Corralation between Kane Biotech and Biovaxys Technology

Assuming the 90 days horizon Kane Biotech is expected to under-perform the Biovaxys Technology. But the otc stock apears to be less risky and, when comparing its historical volatility, Kane Biotech is 1.31 times less risky than Biovaxys Technology. The otc stock trades about -0.08 of its potential returns per unit of risk. The Biovaxys Technology Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4.94  in Biovaxys Technology Corp on September 25, 2024 and sell it today you would lose (0.05) from holding Biovaxys Technology Corp or give up 1.01% of portfolio value over 90 days.

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

Kane Biotech  vs.  Biovaxys Technology Corp

Kane Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Biovaxys Technology Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biovaxys Technology Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Biovaxys Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kane Biotech and Biovaxys Technology

The main advantage of trading using opposite Kane Biotech and Biovaxys Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kane Biotech 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 Kane Biotech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.