Correlation Between Biomx and Cannabics Pharmaceuticals

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

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

Diversification Opportunities for Biomx and Cannabics Pharmaceuticals

-0.04

Correlation Coefficient

Biomx  Cannabics Pharmaceuticals

Good diversification

The 3 months correlation between Biomx and Cannabics is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Biomx Inc and Cannabics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabics Pharmaceuticals 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 Cannabics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabics Pharmaceuticals has no effect on the direction of Biomx i.e., Biomx and Cannabics Pharmaceuticals go up and down completely randomly.

Pair Corralation between Biomx and Cannabics Pharmaceuticals

Given the investment horizon of 90 days Biomx Inc is expected to generate 0.39 times more return on investment than Cannabics Pharmaceuticals. However, Biomx Inc is 2.58 times less risky than Cannabics Pharmaceuticals. It trades about 0.23 of its potential returns per unit of risk. Cannabics Pharmaceuticals is currently generating about 0.07 per unit of risk. If you would invest  64.00  in Biomx Inc on October 27, 2024 and sell it today you would earn a total of  16.00  from holding Biomx Inc or generate 25.0% return on investment over 90 days.

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

Biomx Inc  vs.  Cannabics Pharmaceuticals

Biomx Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biomx Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Cannabics Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cannabics Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, Cannabics Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biomx and Cannabics Pharmaceuticals

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

The idea behind Biomx Inc and Cannabics Pharmaceuticals 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.