Correlation Between Bio Gene and FleetPartners
Can any of the company-specific risk be diversified away by investing in both Bio Gene and FleetPartners 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 FleetPartners 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 FleetPartners Group, you can compare the effects of market volatilities on Bio Gene and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and FleetPartners.
Diversification Opportunities for Bio Gene and FleetPartners
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and FleetPartners is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Bio Gene i.e., Bio Gene and FleetPartners go up and down completely randomly.
Pair Corralation between Bio Gene and FleetPartners
Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the FleetPartners. In addition to that, Bio Gene is 2.72 times more volatile than FleetPartners Group. It trades about -0.01 of its total potential returns per unit of risk. FleetPartners Group is currently generating about 0.06 per unit of volatility. If you would invest 225.00 in FleetPartners Group on September 2, 2024 and sell it today you would earn a total of 92.00 from holding FleetPartners Group or generate 40.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. FleetPartners Group
Performance |
| Timeline |
| Bio Gene Technology |
| FleetPartners Group |
Bio Gene and FleetPartners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and FleetPartners
The main advantage of trading using opposite Bio Gene and FleetPartners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene position performs unexpectedly, FleetPartners 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 FleetPartners will offset losses from the drop in FleetPartners' long position.| Bio Gene vs. Northern Star Resources | Bio Gene vs. Evolution Mining | Bio Gene vs. Bluescope Steel | Bio Gene vs. Sandfire Resources NL |
| FleetPartners vs. Platinum Asia Investments | FleetPartners vs. G8 Education | FleetPartners vs. Perseus Mining | FleetPartners vs. Centuria Industrial Reit |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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