Correlation Between BioNexus Gene and NewMarket
Can any of the company-specific risk be diversified away by investing in both BioNexus Gene and NewMarket 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 BioNexus Gene and NewMarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioNexus Gene Lab and NewMarket, you can compare the effects of market volatilities on BioNexus Gene and NewMarket 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 BioNexus Gene with a short position of NewMarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioNexus Gene and NewMarket.
Diversification Opportunities for BioNexus Gene and NewMarket
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BioNexus and NewMarket is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BioNexus Gene Lab and NewMarket in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMarket and BioNexus Gene 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 BioNexus Gene Lab are associated (or correlated) with NewMarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewMarket has no effect on the direction of BioNexus Gene i.e., BioNexus Gene and NewMarket go up and down completely randomly.
Pair Corralation between BioNexus Gene and NewMarket
Given the investment horizon of 90 days BioNexus Gene Lab is expected to generate 6.86 times more return on investment than NewMarket. However, BioNexus Gene is 6.86 times more volatile than NewMarket. It trades about 0.03 of its potential returns per unit of risk. NewMarket is currently generating about -0.07 per unit of risk. If you would invest 43.00 in BioNexus Gene Lab on November 1, 2024 and sell it today you would lose (2.00) from holding BioNexus Gene Lab or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioNexus Gene Lab vs. NewMarket
Performance |
| Timeline |
| BioNexus Gene Lab |
| NewMarket |
BioNexus Gene and NewMarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioNexus Gene and NewMarket
The main advantage of trading using opposite BioNexus Gene and NewMarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioNexus Gene position performs unexpectedly, NewMarket 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 NewMarket will offset losses from the drop in NewMarket's long position.| BioNexus Gene vs. Greystone Logistics | BioNexus Gene vs. Innospec | BioNexus Gene vs. C Bond Systems | BioNexus Gene vs. H B Fuller |
| NewMarket vs. H B Fuller | NewMarket vs. Minerals Technologies | NewMarket vs. Quaker Chemical | NewMarket vs. Oil Dri |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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