Correlation Between Oncology Pharma and Burzynski Research

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

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

Diversification Opportunities for Oncology Pharma and Burzynski Research

-0.08

Correlation Coefficient

Oncology Pharma  Burzynski Research

Good diversification

The 3 months correlation between Oncology and Burzynski is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oncology Pharma and Burzynski Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burzynski Research and Oncology Pharma 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 Oncology Pharma are associated (or correlated) with Burzynski Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burzynski Research has no effect on the direction of Oncology Pharma i.e., Oncology Pharma and Burzynski Research go up and down completely randomly.

Pair Corralation between Oncology Pharma and Burzynski Research

Given the investment horizon of 90 days Oncology Pharma is expected to generate 17.8 times more return on investment than Burzynski Research. However, Oncology Pharma is 17.8 times more volatile than Burzynski Research. It trades about 0.29 of its potential returns per unit of risk. Burzynski Research is currently generating about 0.03 per unit of risk. If you would invest  0.01  in Oncology Pharma on December 30, 2024 and sell it today you would lose (0.01) from holding Oncology Pharma or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.13%
Values	Daily Returns

Oncology Pharma  vs.  Burzynski Research

Oncology Pharma

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oncology Pharma are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Oncology Pharma demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Burzynski Research

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Burzynski Research are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Burzynski Research reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oncology Pharma and Burzynski Research

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

The idea behind Oncology Pharma and Burzynski Research 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.