Correlation Between Beyond Air and Heartbeam Warrant

Can any of the company-specific risk be diversified away by investing in both Beyond Air and Heartbeam Warrant 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 Beyond Air and Heartbeam Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beyond Air and Heartbeam Warrant, you can compare the effects of market volatilities on Beyond Air and Heartbeam Warrant 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 Beyond Air with a short position of Heartbeam Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Air and Heartbeam Warrant.

Diversification Opportunities for Beyond Air and Heartbeam Warrant

0.48

Correlation Coefficient

Beyond Air  Heartbeam Warrant

Very weak diversification

The 3 months correlation between Beyond and Heartbeam is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Heartbeam Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam Warrant and Beyond Air 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 Beyond Air are associated (or correlated) with Heartbeam Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartbeam Warrant has no effect on the direction of Beyond Air i.e., Beyond Air and Heartbeam Warrant go up and down completely randomly.

Pair Corralation between Beyond Air and Heartbeam Warrant

Given the investment horizon of 90 days Beyond Air is expected to generate 0.91 times more return on investment than Heartbeam Warrant. However, Beyond Air is 1.1 times less risky than Heartbeam Warrant. It trades about 0.07 of its potential returns per unit of risk. Heartbeam Warrant is currently generating about 0.01 per unit of risk. If you would invest  36.00  in Beyond Air on October 20, 2024 and sell it today you would earn a total of  6.00  from holding Beyond Air or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.16%
Values	Daily Returns

Beyond Air  vs.  Heartbeam Warrant

Beyond Air

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Air are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward indicators, Beyond Air reported solid returns over the last few months and may actually be approaching a breakup point.

Heartbeam Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heartbeam Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Heartbeam Warrant is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Beyond Air and Heartbeam Warrant

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

The idea behind Beyond Air and Heartbeam Warrant 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.