Correlation Between Bio Techne and Hospital Mater

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

By analyzing existing cross correlation between Bio Techne and Hospital Mater Dei, you can compare the effects of market volatilities on Bio Techne and Hospital Mater 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 Bio Techne with a short position of Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Techne and Hospital Mater.

Diversification Opportunities for Bio Techne and Hospital Mater

-0.27

Correlation Coefficient

Bio Techne  Hospital Mater

Very good diversification

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

Pair Corralation between Bio Techne and Hospital Mater

Assuming the 90 days trading horizon Bio Techne is expected to under-perform the Hospital Mater. But the stock apears to be less risky and, when comparing its historical volatility, Bio Techne is 2.61 times less risky than Hospital Mater. The stock trades about -0.3 of its potential returns per unit of risk. The Hospital Mater Dei is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  348.00  in Hospital Mater Dei on December 31, 2024 and sell it today you would earn a total of  60.00  from holding Hospital Mater Dei or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bio Techne  vs.  Hospital Mater Dei

Bio Techne

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bio Techne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hospital Mater Dei

Risk-Adjusted Performance

Modest

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

Pair Trading with Bio Techne and Hospital Mater

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

The idea behind Bio Techne and Hospital Mater Dei 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.