Correlation Between Bioteque and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Bioteque and StShine Optical 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 Bioteque and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bioteque and StShine Optical Co, you can compare the effects of market volatilities on Bioteque and StShine Optical 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 Bioteque with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioteque and StShine Optical.
Diversification Opportunities for Bioteque and StShine Optical
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bioteque and StShine is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bioteque and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Bioteque 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 Bioteque are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Bioteque i.e., Bioteque and StShine Optical go up and down completely randomly.
Pair Corralation between Bioteque and StShine Optical
Assuming the 90 days trading horizon Bioteque is expected to generate 3.84 times less return on investment than StShine Optical. But when comparing it to its historical volatility, Bioteque is 3.52 times less risky than StShine Optical. It trades about 0.15 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 21,350 in StShine Optical Co on August 26, 2024 and sell it today you would earn a total of 1,600 from holding StShine Optical Co or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bioteque vs. StShine Optical Co
Performance |
| Timeline |
| Bioteque |
| StShine Optical |
Bioteque and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bioteque and StShine Optical
The main advantage of trading using opposite Bioteque and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioteque position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Bioteque vs. StShine Optical Co | Bioteque vs. United Orthopedic | Bioteque vs. Excelsior Medical Co | Bioteque vs. Pacific Hospital Supply |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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