Correlation Between Ainos and Biomerica
Can any of the company-specific risk be diversified away by investing in both Ainos and Biomerica 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 Ainos and Biomerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ainos Inc and Biomerica, you can compare the effects of market volatilities on Ainos and Biomerica 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 Ainos with a short position of Biomerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainos and Biomerica.
Diversification Opportunities for Ainos and Biomerica
Poor diversification
The 3 months correlation between Ainos and Biomerica is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ainos Inc and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica and Ainos 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 Ainos Inc are associated (or correlated) with Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Ainos i.e., Ainos and Biomerica go up and down completely randomly.
Pair Corralation between Ainos and Biomerica
Given the investment horizon of 90 days Ainos Inc is expected to under-perform the Biomerica. But the stock apears to be less risky and, when comparing its historical volatility, Ainos Inc is 1.02 times less risky than Biomerica. The stock trades about -0.16 of its potential returns per unit of risk. The Biomerica is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Biomerica on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Biomerica or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ainos Inc vs. Biomerica
Performance |
| Timeline |
| Ainos Inc |
| Biomerica |
Ainos and Biomerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ainos and Biomerica
The main advantage of trading using opposite Ainos and Biomerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainos position performs unexpectedly, Biomerica 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 Biomerica will offset losses from the drop in Biomerica's long position.The idea behind Ainos Inc and Biomerica 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.| Biomerica vs. SurModics | Biomerica vs. Movano Inc | Biomerica vs. Ainos Inc | Biomerica vs. Tivic Health Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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