Correlation Between Baijiayun and IDEX Biometrics

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

By analyzing existing cross correlation between Baijiayun Group and IDEX Biometrics ASA, you can compare the effects of market volatilities on Baijiayun and IDEX Biometrics 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 Baijiayun with a short position of IDEX Biometrics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baijiayun and IDEX Biometrics.

Diversification Opportunities for Baijiayun and IDEX Biometrics

0.58

Correlation Coefficient

Baijiayun  IDEX Biometrics

Very weak diversification

The 3 months correlation between Baijiayun and IDEX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Baijiayun Group and IDEX Biometrics ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX Biometrics ASA and Baijiayun 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 Baijiayun Group are associated (or correlated) with IDEX Biometrics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX Biometrics ASA has no effect on the direction of Baijiayun i.e., Baijiayun and IDEX Biometrics go up and down completely randomly.

Pair Corralation between Baijiayun and IDEX Biometrics

If you would invest  826.00  in Baijiayun Group on August 31, 2024 and sell it today you would earn a total of  118.00  from holding Baijiayun Group or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.27%
Values	Daily Returns

Baijiayun Group  vs.  IDEX Biometrics ASA

Baijiayun Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baijiayun Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Baijiayun exhibited solid returns over the last few months and may actually be approaching a breakup point.

IDEX Biometrics ASA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Baijiayun and IDEX Biometrics

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

The idea behind Baijiayun Group and IDEX Biometrics ASA 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.