Correlation Between Terminal X and BioLight Life

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

By analyzing existing cross correlation between Terminal X Online and BioLight Life Sciences, you can compare the effects of market volatilities on Terminal X and BioLight Life 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 Terminal X with a short position of BioLight Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terminal X and BioLight Life.

Diversification Opportunities for Terminal X and BioLight Life

0.0

Correlation Coefficient

Terminal X  BioLight Life

Pay attention - limited upside

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

Pair Corralation between Terminal X and BioLight Life

If you would invest  28,400  in Terminal X Online on October 25, 2024 and sell it today you would earn a total of  22,220  from holding Terminal X Online or generate 78.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Terminal X Online  vs.  BioLight Life Sciences

Terminal X Online

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Terminal X Online are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Terminal X sustained solid returns over the last few months and may actually be approaching a breakup point.

BioLight Life Sciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioLight Life Sciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BioLight Life sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Terminal X and BioLight Life

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

The idea behind Terminal X Online and BioLight Life Sciences 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.