Correlation Between Institute and BioCube

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

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

Diversification Opportunities for Institute and BioCube

0.0

Correlation Coefficient

Institute  BioCube

Pay attention - limited upside

The 3 months correlation between Institute and BioCube is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Institute of Biomedical and BioCube in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioCube and Institute 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 Institute of Biomedical are associated (or correlated) with BioCube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioCube has no effect on the direction of Institute i.e., Institute and BioCube go up and down completely randomly.

Pair Corralation between Institute and BioCube

If you would invest  0.43  in Institute of Biomedical on October 26, 2024 and sell it today you would earn a total of  2.27  from holding Institute of Biomedical or generate 527.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Institute of Biomedical  vs.  BioCube

Institute of Biomedical

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Institute of Biomedical are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Institute unveiled solid returns over the last few months and may actually be approaching a breakup point.

BioCube

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioCube has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, BioCube is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Institute and BioCube

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

The idea behind Institute of Biomedical and BioCube 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.