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
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bioteque and StShine is 0.66. 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 under-perform the StShine Optical. But the stock apears to be less risky and, when comparing its historical volatility, Bioteque is 1.85 times less risky than StShine Optical. The stock trades about -0.2 of its potential returns per unit of risk. The StShine Optical Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 19,400 in StShine Optical Co on November 7, 2024 and sell it today you would lose (350.00) from holding StShine Optical Co or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Bioteque vs. StShine Optical Co
Performance |
| Timeline |
| Bioteque |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| StShine Optical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
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.The idea behind Bioteque and StShine Optical Co 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.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance |