Correlation Between Hospital Mater and Bio Techne

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

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

Diversification Opportunities for Hospital Mater and Bio Techne

-0.27

Correlation Coefficient

Hospital Mater  Bio Techne

Very good diversification

The 3 months correlation between Hospital and Bio is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Bio Techne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne has no effect on the direction of Hospital Mater i.e., Hospital Mater and Bio Techne go up and down completely randomly.

Pair Corralation between Hospital Mater and Bio Techne

Assuming the 90 days trading horizon Hospital Mater Dei is expected to generate 2.61 times more return on investment than Bio Techne. However, Hospital Mater is 2.61 times more volatile than Bio Techne. It trades about 0.09 of its potential returns per unit of risk. Bio Techne is currently generating about -0.3 per unit of risk. If you would invest  348.00  in Hospital Mater Dei on December 31, 2024 and sell it today you would earn a total of  60.00  from holding Hospital Mater Dei or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Hospital Mater Dei  vs.  Bio Techne

Hospital Mater Dei

Risk-Adjusted Performance

Modest

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

Bio Techne

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Techne 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 fundamental indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hospital Mater and Bio Techne

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

The idea behind Hospital Mater Dei and Bio Techne 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.