Correlation Between XTL Biopharmaceutica and Baran

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

By analyzing existing cross correlation between XTL Biopharmaceuticals and Baran Group, you can compare the effects of market volatilities on XTL Biopharmaceutica and Baran 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 XTL Biopharmaceutica with a short position of Baran. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTL Biopharmaceutica and Baran.

Diversification Opportunities for XTL Biopharmaceutica and Baran

0.16

Correlation Coefficient

XTL Biopharmaceutica  Baran

Average diversification

The 3 months correlation between XTL and Baran is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding XTL Biopharmaceuticals and Baran Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baran Group and XTL Biopharmaceutica 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 XTL Biopharmaceuticals are associated (or correlated) with Baran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baran Group has no effect on the direction of XTL Biopharmaceutica i.e., XTL Biopharmaceutica and Baran go up and down completely randomly.

Pair Corralation between XTL Biopharmaceutica and Baran

Assuming the 90 days trading horizon XTL Biopharmaceuticals is expected to under-perform the Baran. In addition to that, XTL Biopharmaceutica is 1.79 times more volatile than Baran Group. It trades about -0.2 of its total potential returns per unit of risk. Baran Group is currently generating about -0.04 per unit of volatility. If you would invest  147,300  in Baran Group on December 29, 2024 and sell it today you would lose (7,000) from holding Baran Group or give up 4.75% of portfolio value over 90 days.

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

XTL Biopharmaceuticals  vs.  Baran Group

XTL Biopharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days XTL Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Baran Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baran Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Baran is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with XTL Biopharmaceutica and Baran

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

The idea behind XTL Biopharmaceuticals and Baran Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.