Correlation Between Nu Med and Biomerica

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

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

Diversification Opportunities for Nu Med and Biomerica

0.01

Correlation Coefficient

Nu Med  Biomerica

Significant diversification

The 3 months correlation between NUMD and Biomerica is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nu Med Plus and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica and Nu Med 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 Nu Med Plus are associated (or correlated) with Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Nu Med i.e., Nu Med and Biomerica go up and down completely randomly.

Pair Corralation between Nu Med and Biomerica

Given the investment horizon of 90 days Nu Med Plus is expected to under-perform the Biomerica. In addition to that, Nu Med is 1.95 times more volatile than Biomerica. It trades about -0.09 of its total potential returns per unit of risk. Biomerica is currently generating about 0.05 per unit of volatility. If you would invest  31.00  in Biomerica on October 7, 2024 and sell it today you would earn a total of  3.00  from holding Biomerica or generate 9.68% return on investment over 90 days.

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

Nu Med Plus  vs.  Biomerica

Nu Med Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nu Med Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Biomerica

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biomerica sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nu Med and Biomerica

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

The idea behind Nu Med Plus and Biomerica 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.