Correlation Between Bionoid Pharma and Stem Holdings
Can any of the company-specific risk be diversified away by investing in both Bionoid Pharma and Stem Holdings 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 Bionoid Pharma and Stem Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bionoid Pharma and Stem Holdings, you can compare the effects of market volatilities on Bionoid Pharma and Stem Holdings 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 Bionoid Pharma with a short position of Stem Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bionoid Pharma and Stem Holdings.
Diversification Opportunities for Bionoid Pharma and Stem Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bionoid and Stem is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bionoid Pharma and Stem Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stem Holdings and Bionoid Pharma 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 Bionoid Pharma are associated (or correlated) with Stem Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stem Holdings has no effect on the direction of Bionoid Pharma i.e., Bionoid Pharma and Stem Holdings go up and down completely randomly.
Pair Corralation between Bionoid Pharma and Stem Holdings
Given the investment horizon of 90 days Bionoid Pharma is expected to generate 1.21 times less return on investment than Stem Holdings. But when comparing it to its historical volatility, Bionoid Pharma is 1.14 times less risky than Stem Holdings. It trades about 0.06 of its potential returns per unit of risk. Stem Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Stem Holdings on November 2, 2024 and sell it today you would lose (2.00) from holding Stem Holdings or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bionoid Pharma vs. Stem Holdings
Performance |
| Timeline |
| Bionoid Pharma |
| Stem Holdings |
Bionoid Pharma and Stem Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bionoid Pharma and Stem Holdings
The main advantage of trading using opposite Bionoid Pharma and Stem Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bionoid Pharma position performs unexpectedly, Stem Holdings 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 Stem Holdings will offset losses from the drop in Stem Holdings' long position.| Bionoid Pharma vs. Weibo Corp | Bionoid Pharma vs. Tandem Diabetes Care | Bionoid Pharma vs. Cardinal Health | Bionoid Pharma vs. Space Communication |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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