Correlation Between Biomx and Compugen

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

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

Diversification Opportunities for Biomx and Compugen

0.47

Correlation Coefficient

Biomx  Compugen

Very weak diversification

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

Pair Corralation between Biomx and Compugen

Given the investment horizon of 90 days Biomx Inc is expected to under-perform the Compugen. In addition to that, Biomx is 1.28 times more volatile than Compugen. It trades about -0.06 of its total potential returns per unit of risk. Compugen is currently generating about 0.1 per unit of volatility. If you would invest  165.00  in Compugen on December 2, 2024 and sell it today you would earn a total of  27.00  from holding Compugen or generate 16.36% return on investment over 90 days.

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

Biomx Inc  vs.  Compugen

Biomx Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biomx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Biomx is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Compugen

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compugen are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Compugen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biomx and Compugen

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

The idea behind Biomx Inc and Compugen 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.