Correlation Between TaiMed Biologics and Level Biotechnology
Can any of the company-specific risk be diversified away by investing in both TaiMed Biologics and Level Biotechnology 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 TaiMed Biologics and Level Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TaiMed Biologics and Level Biotechnology, you can compare the effects of market volatilities on TaiMed Biologics and Level Biotechnology 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 TaiMed Biologics with a short position of Level Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TaiMed Biologics and Level Biotechnology.
Diversification Opportunities for TaiMed Biologics and Level Biotechnology
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between TaiMed and Level is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding TaiMed Biologics and Level Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Level Biotechnology and TaiMed Biologics 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 TaiMed Biologics are associated (or correlated) with Level Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Level Biotechnology has no effect on the direction of TaiMed Biologics i.e., TaiMed Biologics and Level Biotechnology go up and down completely randomly.
Pair Corralation between TaiMed Biologics and Level Biotechnology
Assuming the 90 days trading horizon TaiMed Biologics is expected to generate 2.6 times more return on investment than Level Biotechnology. However, TaiMed Biologics is 2.6 times more volatile than Level Biotechnology. It trades about 0.03 of its potential returns per unit of risk. Level Biotechnology is currently generating about 0.05 per unit of risk. If you would invest 7,030 in TaiMed Biologics on September 2, 2024 and sell it today you would earn a total of 1,400 from holding TaiMed Biologics or generate 19.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TaiMed Biologics vs. Level Biotechnology
Performance |
| Timeline |
| TaiMed Biologics |
| Level Biotechnology |
TaiMed Biologics and Level Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TaiMed Biologics and Level Biotechnology
The main advantage of trading using opposite TaiMed Biologics and Level Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TaiMed Biologics position performs unexpectedly, Level Biotechnology 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 Level Biotechnology will offset losses from the drop in Level Biotechnology's long position.| TaiMed Biologics vs. OBI Pharma | TaiMed Biologics vs. PharmaEngine | TaiMed Biologics vs. Medigen Biotechnology | TaiMed Biologics vs. TTY Biopharm Co |
| Level Biotechnology vs. Medigen Vaccine Biologics | Level Biotechnology vs. TaiMed Biologics | Level Biotechnology vs. Adimmune Corp | Level Biotechnology vs. PharmaEngine |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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