Correlation Between Lion Biotechnologies and Bank Of
Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and Bank Of 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 Lion Biotechnologies and Bank Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Biotechnologies and The Bank of, you can compare the effects of market volatilities on Lion Biotechnologies and Bank Of 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 Lion Biotechnologies with a short position of Bank Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and Bank Of.
Diversification Opportunities for Lion Biotechnologies and Bank Of
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Bank is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Bank and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with Bank Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Bank has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and Bank Of go up and down completely randomly.
Pair Corralation between Lion Biotechnologies and Bank Of
Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the Bank Of. In addition to that, Lion Biotechnologies is 2.88 times more volatile than The Bank of. It trades about -0.12 of its total potential returns per unit of risk. The Bank of is currently generating about -0.05 per unit of volatility. If you would invest 7,488 in The Bank of on September 22, 2024 and sell it today you would lose (98.00) from holding The Bank of or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Biotechnologies vs. The Bank of
Performance |
| Timeline |
| Lion Biotechnologies |
| The Bank |
Lion Biotechnologies and Bank Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Biotechnologies and Bank Of
The main advantage of trading using opposite Lion Biotechnologies and Bank Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, Bank Of 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 Bank Of will offset losses from the drop in Bank Of's long position.| Lion Biotechnologies vs. DIVERSIFIED ROYALTY | Lion Biotechnologies vs. SALESFORCE INC CDR | Lion Biotechnologies vs. RETAIL FOOD GROUP | Lion Biotechnologies vs. CANON MARKETING JP |
| Bank Of vs. GRIFFIN MINING LTD | Bank Of vs. Caseys General Stores | Bank Of vs. Calibre Mining Corp | Bank Of vs. MCEWEN MINING INC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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