Correlation Between Regen BioPharma and Silo Pharma

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

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

Diversification Opportunities for Regen BioPharma and Silo Pharma

0.27

Correlation Coefficient

Regen BioPharma  Silo Pharma

Modest diversification

The 3 months correlation between Regen and Silo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Regen BioPharma and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma and Regen BioPharma 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 Regen BioPharma are associated (or correlated) with Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of Regen BioPharma i.e., Regen BioPharma and Silo Pharma go up and down completely randomly.

Pair Corralation between Regen BioPharma and Silo Pharma

Assuming the 90 days horizon Regen BioPharma is expected to generate 9.66 times more return on investment than Silo Pharma. However, Regen BioPharma is 9.66 times more volatile than Silo Pharma. It trades about 0.13 of its potential returns per unit of risk. Silo Pharma is currently generating about -0.01 per unit of risk. If you would invest  18.00  in Regen BioPharma on September 2, 2024 and sell it today you would lose (9.96) from holding Regen BioPharma or give up 55.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Regen BioPharma  vs.  Silo Pharma

Regen BioPharma

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Silo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silo Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Silo Pharma is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Regen BioPharma and Silo Pharma

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

The idea behind Regen BioPharma and Silo Pharma 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..