Correlation Between Vytrus Biotech and Borges Agricultural

Can any of the company-specific risk be diversified away by investing in both Vytrus Biotech and Borges Agricultural 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 Vytrus Biotech and Borges Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vytrus Biotech SA and Borges Agricultural Industrial, you can compare the effects of market volatilities on Vytrus Biotech and Borges Agricultural 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 Vytrus Biotech with a short position of Borges Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vytrus Biotech and Borges Agricultural.

Diversification Opportunities for Vytrus Biotech and Borges Agricultural

0.89

Correlation Coefficient

Vytrus Biotech  Borges Agricultural

Very poor diversification

The 3 months correlation between Vytrus and Borges is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vytrus Biotech SA and Borges Agricultural Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borges Agricultural and Vytrus Biotech 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 Vytrus Biotech SA are associated (or correlated) with Borges Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borges Agricultural has no effect on the direction of Vytrus Biotech i.e., Vytrus Biotech and Borges Agricultural go up and down completely randomly.

Pair Corralation between Vytrus Biotech and Borges Agricultural

Assuming the 90 days trading horizon Vytrus Biotech SA is expected to generate 0.72 times more return on investment than Borges Agricultural. However, Vytrus Biotech SA is 1.39 times less risky than Borges Agricultural. It trades about 0.25 of its potential returns per unit of risk. Borges Agricultural Industrial is currently generating about 0.13 per unit of risk. If you would invest  220.00  in Vytrus Biotech SA on December 27, 2024 and sell it today you would earn a total of  62.00  from holding Vytrus Biotech SA or generate 28.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Vytrus Biotech SA  vs.  Borges Agricultural Industrial

Vytrus Biotech SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vytrus Biotech SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Vytrus Biotech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Borges Agricultural

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Borges Agricultural Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Borges Agricultural exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vytrus Biotech and Borges Agricultural

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

The idea behind Vytrus Biotech SA and Borges Agricultural Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.