Correlation Between ProKidney Corp and Bionomics

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

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

Diversification Opportunities for ProKidney Corp and Bionomics

0.13

Correlation Coefficient

ProKidney Corp  Bionomics

Average diversification

The 3 months correlation between ProKidney and Bionomics is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ProKidney Corp and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited and ProKidney Corp 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 ProKidney 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 ProKidney Corp i.e., ProKidney Corp and Bionomics go up and down completely randomly.

Pair Corralation between ProKidney Corp and Bionomics

If you would invest  175.00  in ProKidney Corp on October 12, 2024 and sell it today you would lose (9.00) from holding ProKidney Corp or give up 5.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

ProKidney Corp  vs.  Bionomics Limited

ProKidney Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProKidney Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, ProKidney Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 ProKidney Corp and Bionomics

The main advantage of trading using opposite ProKidney Corp and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProKidney Corp 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 ProKidney 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.