Correlation Between Bio Gene and Autosports
Can any of the company-specific risk be diversified away by investing in both Bio Gene and Autosports 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 Bio Gene and Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Gene Technology and Autosports Group, you can compare the effects of market volatilities on Bio Gene and Autosports 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 Bio Gene with a short position of Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and Autosports.
Diversification Opportunities for Bio Gene and Autosports
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bio and Autosports is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group and Bio 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 Bio Gene Technology are associated (or correlated) with Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of Bio Gene i.e., Bio Gene and Autosports go up and down completely randomly.
Pair Corralation between Bio Gene and Autosports
Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the Autosports. In addition to that, Bio Gene is 3.77 times more volatile than Autosports Group. It trades about -0.18 of its total potential returns per unit of risk. Autosports Group is currently generating about -0.61 per unit of volatility. If you would invest 235.00 in Autosports Group on August 31, 2024 and sell it today you would lose (46.00) from holding Autosports Group or give up 19.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. Autosports Group
Performance |
| Timeline |
| Bio Gene Technology |
| Autosports Group |
Bio Gene and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and Autosports
The main advantage of trading using opposite Bio Gene and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.The idea behind Bio Gene Technology and Autosports Group 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.| Autosports vs. Aneka Tambang Tbk | Autosports vs. Unibail Rodamco Westfield SE | Autosports vs. Macquarie Group | Autosports vs. Commonwealth Bank |
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.
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