Correlation Between Parade Technologies and Bioteque
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and Bioteque 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 Parade Technologies and Bioteque into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and Bioteque, you can compare the effects of market volatilities on Parade Technologies and Bioteque 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 Parade Technologies with a short position of Bioteque. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and Bioteque.
Diversification Opportunities for Parade Technologies and Bioteque
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parade and Bioteque is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and Bioteque in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioteque and Parade Technologies 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 Parade Technologies are associated (or correlated) with Bioteque. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioteque has no effect on the direction of Parade Technologies i.e., Parade Technologies and Bioteque go up and down completely randomly.
Pair Corralation between Parade Technologies and Bioteque
Assuming the 90 days trading horizon Parade Technologies is expected to under-perform the Bioteque. In addition to that, Parade Technologies is 2.22 times more volatile than Bioteque. It trades about -0.2 of its total potential returns per unit of risk. Bioteque is currently generating about -0.2 per unit of volatility. If you would invest 12,450 in Bioteque on November 7, 2024 and sell it today you would lose (350.00) from holding Bioteque or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parade Technologies vs. Bioteque
Performance |
| Timeline |
| Parade Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Bioteque |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Parade Technologies and Bioteque Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and Bioteque
The main advantage of trading using opposite Parade Technologies and Bioteque positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, Bioteque 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 Bioteque will offset losses from the drop in Bioteque's long position.The idea behind Parade Technologies and Bioteque 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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