Correlation Between Molekule and Bion Environmental

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

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

Diversification Opportunities for Molekule and Bion Environmental

-0.42

Correlation Coefficient

Molekule  Bion Environmental

Very good diversification

The 3 months correlation between Molekule and Bion is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Molekule Group and Bion Environmental Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bion Environmental and Molekule 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 Molekule Group are associated (or correlated) with Bion Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bion Environmental has no effect on the direction of Molekule i.e., Molekule and Bion Environmental go up and down completely randomly.

Pair Corralation between Molekule and Bion Environmental

If you would invest  225.00  in Molekule Group on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Molekule Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.68%
Values	Daily Returns

Molekule Group  vs.  Bion Environmental Technologie

Molekule Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molekule Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Molekule is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bion Environmental

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Bion Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Bion Environmental is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Molekule and Bion Environmental

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

The idea behind Molekule Group and Bion Environmental Technologies 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.