Correlation Between Oryzon Genomics and Biotechnology Assets

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

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

Diversification Opportunities for Oryzon Genomics and Biotechnology Assets

0.47

Correlation Coefficient

Oryzon Genomics  Biotechnology Assets

Very weak diversification

The 3 months correlation between Oryzon and Biotechnology is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Oryzon Genomics SA and Biotechnology Assets SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotechnology Assets and Oryzon Genomics 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 Oryzon Genomics SA are associated (or correlated) with Biotechnology Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotechnology Assets has no effect on the direction of Oryzon Genomics i.e., Oryzon Genomics and Biotechnology Assets go up and down completely randomly.

Pair Corralation between Oryzon Genomics and Biotechnology Assets

Assuming the 90 days trading horizon Oryzon Genomics SA is expected to generate 1.58 times more return on investment than Biotechnology Assets. However, Oryzon Genomics is 1.58 times more volatile than Biotechnology Assets SA. It trades about 0.15 of its potential returns per unit of risk. Biotechnology Assets SA is currently generating about 0.07 per unit of risk. If you would invest  155.00  in Oryzon Genomics SA on December 2, 2024 and sell it today you would earn a total of  94.00  from holding Oryzon Genomics SA or generate 60.65% return on investment over 90 days.

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

Oryzon Genomics SA  vs.  Biotechnology Assets SA

Oryzon Genomics SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oryzon Genomics SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Oryzon Genomics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Biotechnology Assets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Biotechnology Assets SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Biotechnology Assets exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oryzon Genomics and Biotechnology Assets

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

The idea behind Oryzon Genomics SA and Biotechnology Assets SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.