Correlation Between Ignyte Acquisition and Bionomics

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

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

Diversification Opportunities for Ignyte Acquisition and Bionomics

-0.29

Correlation Coefficient

Ignyte Acquisition  Bionomics

Very good diversification

The 3 months correlation between Ignyte and Bionomics is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ignyte Acquisition Corp and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited and Ignyte Acquisition 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 Ignyte Acquisition Corp are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of Ignyte Acquisition i.e., Ignyte Acquisition and Bionomics go up and down completely randomly.

Pair Corralation between Ignyte Acquisition and Bionomics

Assuming the 90 days horizon Ignyte Acquisition Corp is expected to under-perform the Bionomics. In addition to that, Ignyte Acquisition is 1.34 times more volatile than Bionomics Limited. It trades about -0.18 of its total potential returns per unit of risk. Bionomics Limited is currently generating about 0.13 per unit of volatility. If you would invest  2.50  in Bionomics Limited on September 16, 2024 and sell it today you would lose (1.19) from holding Bionomics Limited or give up 47.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.03%
Values	Daily Returns

Ignyte Acquisition Corp  vs.  Bionomics Limited

Ignyte Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ignyte Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ignyte Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bionomics Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionomics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bionomics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ignyte Acquisition and Bionomics

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

The idea behind Ignyte Acquisition Corp and Bionomics Limited 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.