Correlation Between Bio Gene and Future Generation
Can any of the company-specific risk be diversified away by investing in both Bio Gene and Future Generation 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 Future Generation 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 Future Generation Global, you can compare the effects of market volatilities on Bio Gene and Future Generation 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 Future Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and Future Generation.
Diversification Opportunities for Bio Gene and Future Generation
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and Future is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Future Generation Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Generation Global 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 Future Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Generation Global has no effect on the direction of Bio Gene i.e., Bio Gene and Future Generation go up and down completely randomly.
Pair Corralation between Bio Gene and Future Generation
Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the Future Generation. In addition to that, Bio Gene is 10.7 times more volatile than Future Generation Global. It trades about -0.09 of its total potential returns per unit of risk. Future Generation Global is currently generating about -0.06 per unit of volatility. If you would invest 140.00 in Future Generation Global on September 15, 2024 and sell it today you would lose (1.00) from holding Future Generation Global or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bio Gene Technology vs. Future Generation Global
Performance |
| Timeline |
| Bio Gene Technology |
| Future Generation Global |
Bio Gene and Future Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and Future Generation
The main advantage of trading using opposite Bio Gene and Future Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene position performs unexpectedly, Future Generation 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 Future Generation will offset losses from the drop in Future Generation's long position.| Bio Gene vs. Northern Star Resources | Bio Gene vs. Evolution Mining | Bio Gene vs. Bluescope Steel | Bio Gene vs. Sandfire Resources NL |
| Future Generation vs. Audio Pixels Holdings | Future Generation vs. Iodm | Future Generation vs. Nsx | Future Generation vs. TTG Fintech |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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