Correlation Between Bio Rad and Nexalin Technology
Can any of the company-specific risk be diversified away by investing in both Bio Rad and Nexalin 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 Rad and Nexalin Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Rad Laboratories and Nexalin Technology, you can compare the effects of market volatilities on Bio Rad and Nexalin 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 Rad with a short position of Nexalin Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Rad and Nexalin Technology.
Diversification Opportunities for Bio Rad and Nexalin Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and Nexalin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology and Bio Rad 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 Rad Laboratories are associated (or correlated) with Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of Bio Rad i.e., Bio Rad and Nexalin Technology go up and down completely randomly.
Pair Corralation between Bio Rad and Nexalin Technology
Assuming the 90 days horizon Bio Rad Laboratories is expected to generate 9.4 times more return on investment than Nexalin Technology. However, Bio Rad is 9.4 times more volatile than Nexalin Technology. It trades about 0.1 of its potential returns per unit of risk. Nexalin Technology is currently generating about 0.06 per unit of risk. If you would invest 40,466 in Bio Rad Laboratories on September 3, 2024 and sell it today you would lose (6,866) from holding Bio Rad Laboratories or give up 16.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 45.66% |
| Values | Daily Returns |
Bio Rad Laboratories vs. Nexalin Technology
Performance |
| Timeline |
| Bio Rad Laboratories |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Nexalin Technology |
Bio Rad and Nexalin Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Rad and Nexalin Technology
The main advantage of trading using opposite Bio Rad and Nexalin Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Rad position performs unexpectedly, Nexalin 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 Nexalin Technology will offset losses from the drop in Nexalin Technology's long position.The idea behind Bio Rad Laboratories and Nexalin Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nexalin Technology vs. Electromed | Nexalin Technology vs. Armm Inc | Nexalin Technology vs. SurModics | Nexalin Technology vs. Bluejay Diagnostics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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