Correlation Between Sirona Biochem and Intelgenx Technologs

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

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

Diversification Opportunities for Sirona Biochem and Intelgenx Technologs

0.0

Correlation Coefficient

Sirona Biochem  Intelgenx Technologs

Pay attention - limited upside

The 3 months correlation between Sirona and Intelgenx is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sirona Biochem Corp and Intelgenx Technologs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelgenx Technologs and Sirona Biochem 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 Sirona Biochem Corp are associated (or correlated) with Intelgenx Technologs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelgenx Technologs has no effect on the direction of Sirona Biochem i.e., Sirona Biochem and Intelgenx Technologs go up and down completely randomly.

Pair Corralation between Sirona Biochem and Intelgenx Technologs

Assuming the 90 days horizon Sirona Biochem is expected to generate 2.31 times less return on investment than Intelgenx Technologs. In addition to that, Sirona Biochem is 1.19 times more volatile than Intelgenx Technologs. It trades about 0.01 of its total potential returns per unit of risk. Intelgenx Technologs is currently generating about 0.04 per unit of volatility. If you would invest  12.00  in Intelgenx Technologs on September 18, 2024 and sell it today you would earn a total of  5.00  from holding Intelgenx Technologs or generate 41.67% return on investment over 90 days.

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

Sirona Biochem Corp  vs.  Intelgenx Technologs

Sirona Biochem Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sirona Biochem Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Sirona Biochem reported solid returns over the last few months and may actually be approaching a breakup point.

Intelgenx Technologs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelgenx Technologs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intelgenx Technologs is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sirona Biochem and Intelgenx Technologs

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

The idea behind Sirona Biochem Corp and Intelgenx Technologs 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.