Correlation Between Bio Gene and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both Bio Gene and Lykos Metals 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 Lykos Metals 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 Lykos Metals, you can compare the effects of market volatilities on Bio Gene and Lykos Metals 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 Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and Lykos Metals.
Diversification Opportunities for Bio Gene and Lykos Metals
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bio and Lykos is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos Metals 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 Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of Bio Gene i.e., Bio Gene and Lykos Metals go up and down completely randomly.
Pair Corralation between Bio Gene and Lykos Metals
Assuming the 90 days trading horizon Bio Gene Technology is expected to generate 3.14 times more return on investment than Lykos Metals. However, Bio Gene is 3.14 times more volatile than Lykos Metals. It trades about 0.09 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.21 per unit of risk. If you would invest 4.30 in Bio Gene Technology on November 3, 2024 and sell it today you would earn a total of 0.60 from holding Bio Gene Technology or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. Lykos Metals
Performance |
| Timeline |
| Bio Gene Technology |
| Lykos Metals |
Bio Gene and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and Lykos Metals
The main advantage of trading using opposite Bio Gene and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene position performs unexpectedly, Lykos Metals 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 Lykos Metals will offset losses from the drop in Lykos Metals' long position.| Bio Gene vs. Galena Mining | Bio Gene vs. Infomedia | Bio Gene vs. MotorCycle Holdings | Bio Gene vs. ARN Media Limited |
| Lykos Metals vs. Northern Star Resources | Lykos Metals vs. Evolution Mining | Lykos Metals vs. Bluescope Steel | Lykos Metals vs. De Grey Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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