Correlation Between Bio-Techne Corp and Minerals Technologies

Can any of the company-specific risk be diversified away by investing in both Bio-Techne Corp and Minerals Technologies 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 Corp and Minerals Technologies 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 Minerals Technologies, you can compare the effects of market volatilities on Bio-Techne Corp and Minerals Technologies 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 Corp with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio-Techne Corp and Minerals Technologies.

Diversification Opportunities for Bio-Techne Corp and Minerals Technologies

0.28

Correlation Coefficient

Bio-Techne Corp  Minerals Technologies

Modest diversification

The 3 months correlation between Bio-Techne and Minerals is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne Corp and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and Bio-Techne Corp 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Bio-Techne Corp i.e., Bio-Techne Corp and Minerals Technologies go up and down completely randomly.

Pair Corralation between Bio-Techne Corp and Minerals Technologies

Assuming the 90 days trading horizon Bio-Techne Corp is expected to generate 2.07 times less return on investment than Minerals Technologies. In addition to that, Bio-Techne Corp is 1.31 times more volatile than Minerals Technologies. It trades about 0.01 of its total potential returns per unit of risk. Minerals Technologies is currently generating about 0.03 per unit of volatility. If you would invest  5,843  in Minerals Technologies on October 10, 2024 and sell it today you would earn a total of  1,257  from holding Minerals Technologies or generate 21.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bio Techne Corp  vs.  Minerals Technologies

Bio Techne Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bio-Techne Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Minerals Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Minerals Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bio-Techne Corp and Minerals Technologies

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

The idea behind Bio Techne Corp and Minerals Technologies 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.