Correlation Between Bio Gene and Harvest Technology
Can any of the company-specific risk be diversified away by investing in both Bio Gene and Harvest Technology 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 Harvest Technology 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 Harvest Technology Group, you can compare the effects of market volatilities on Bio Gene and Harvest Technology 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 Harvest Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and Harvest Technology.
Diversification Opportunities for Bio Gene and Harvest Technology
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bio and Harvest is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Harvest Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Technology 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 Harvest Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Technology has no effect on the direction of Bio Gene i.e., Bio Gene and Harvest Technology go up and down completely randomly.
Pair Corralation between Bio Gene and Harvest Technology
Assuming the 90 days trading horizon Bio Gene Technology is expected to generate 2.21 times more return on investment than Harvest Technology. However, Bio Gene is 2.21 times more volatile than Harvest Technology Group. It trades about 0.07 of its potential returns per unit of risk. Harvest Technology Group is currently generating about -0.09 per unit of risk. If you would invest 3.20 in Bio Gene Technology on November 27, 2024 and sell it today you would earn a total of 0.20 from holding Bio Gene Technology or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. Harvest Technology Group
Performance |
| Timeline |
| Bio Gene Technology |
| Harvest Technology |
Bio Gene and Harvest Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and Harvest Technology
The main advantage of trading using opposite Bio Gene and Harvest Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene position performs unexpectedly, Harvest Technology 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 Harvest Technology will offset losses from the drop in Harvest Technology's long position.| Bio Gene vs. Retail Food Group | Bio Gene vs. The Environmental Group | Bio Gene vs. Mount Gibson Iron | Bio Gene vs. Sandon Capital Investments |
| Harvest Technology vs. Autosports Group | Harvest Technology vs. Queste Communications | Harvest Technology vs. Sky Metals | Harvest Technology vs. Aussie Broadband |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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