Correlation Between Quoin Pharmaceuticals and Bio Path

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

By analyzing existing cross correlation between Quoin Pharmaceuticals Ltd and Bio Path Holdings, you can compare the effects of market volatilities on Quoin Pharmaceuticals and Bio Path 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 Quoin Pharmaceuticals with a short position of Bio Path. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quoin Pharmaceuticals and Bio Path.

Diversification Opportunities for Quoin Pharmaceuticals and Bio Path

-0.09

Correlation Coefficient

Quoin Pharmaceuticals  Bio Path

Good diversification

The 3 months correlation between Quoin and Bio is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Quoin Pharmaceuticals Ltd and Bio Path Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Path Holdings and Quoin Pharmaceuticals 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 Quoin Pharmaceuticals Ltd are associated (or correlated) with Bio Path. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Path Holdings has no effect on the direction of Quoin Pharmaceuticals i.e., Quoin Pharmaceuticals and Bio Path go up and down completely randomly.

Pair Corralation between Quoin Pharmaceuticals and Bio Path

Given the investment horizon of 90 days Quoin Pharmaceuticals Ltd is expected to under-perform the Bio Path. But the stock apears to be less risky and, when comparing its historical volatility, Quoin Pharmaceuticals Ltd is 1.37 times less risky than Bio Path. The stock trades about -0.05 of its potential returns per unit of risk. The Bio Path Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,840  in Bio Path Holdings on October 7, 2024 and sell it today you would lose (3,724) from holding Bio Path Holdings or give up 96.98% of portfolio value over 90 days.

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

Quoin Pharmaceuticals Ltd  vs.  Bio Path Holdings

Quoin Pharmaceuticals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quoin Pharmaceuticals Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Quoin Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Bio Path Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Path Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Bio Path demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quoin Pharmaceuticals and Bio Path

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

The idea behind Quoin Pharmaceuticals Ltd and Bio Path Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.