Correlation Between Bio Techne and ACCSYS TECHPLC

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

By analyzing existing cross correlation between Bio Techne Corp and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on Bio Techne and ACCSYS TECHPLC 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 ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Techne and ACCSYS TECHPLC.

Diversification Opportunities for Bio Techne and ACCSYS TECHPLC

-0.08

Correlation Coefficient

Bio Techne  ACCSYS TECHPLC

Good diversification

The 3 months correlation between Bio and ACCSYS is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne Corp and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO 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 Corp are associated (or correlated) with ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of Bio Techne i.e., Bio Techne and ACCSYS TECHPLC go up and down completely randomly.

Pair Corralation between Bio Techne and ACCSYS TECHPLC

Assuming the 90 days trading horizon Bio Techne Corp is expected to generate 0.87 times more return on investment than ACCSYS TECHPLC. However, Bio Techne Corp is 1.14 times less risky than ACCSYS TECHPLC. It trades about 0.16 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.08 per unit of risk. If you would invest  6,293  in Bio Techne Corp on October 25, 2024 and sell it today you would earn a total of  1,257  from holding Bio Techne Corp or generate 19.97% return on investment over 90 days.

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

Bio Techne Corp  vs.  ACCSYS TECHPLC EO

Bio Techne Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bio Techne unveiled solid returns over the last few months and may actually be approaching a breakup point.

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Bio Techne and ACCSYS TECHPLC

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

The idea behind Bio Techne Corp and ACCSYS TECHPLC EO 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..