Correlation Between Biofarm Bucure and Safetech Innovations
Can any of the company-specific risk be diversified away by investing in both Biofarm Bucure and Safetech Innovations 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 Biofarm Bucure and Safetech Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofarm Bucure and Safetech Innovations SA, you can compare the effects of market volatilities on Biofarm Bucure and Safetech Innovations 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 Biofarm Bucure with a short position of Safetech Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofarm Bucure and Safetech Innovations.
Diversification Opportunities for Biofarm Bucure and Safetech Innovations
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biofarm and Safetech is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Biofarm Bucure and Safetech Innovations SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safetech Innovations and Biofarm Bucure 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 Biofarm Bucure are associated (or correlated) with Safetech Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safetech Innovations has no effect on the direction of Biofarm Bucure i.e., Biofarm Bucure and Safetech Innovations go up and down completely randomly.
Pair Corralation between Biofarm Bucure and Safetech Innovations
Assuming the 90 days trading horizon Biofarm Bucure is expected to generate 0.51 times more return on investment than Safetech Innovations. However, Biofarm Bucure is 1.95 times less risky than Safetech Innovations. It trades about -0.1 of its potential returns per unit of risk. Safetech Innovations SA is currently generating about -0.11 per unit of risk. If you would invest 73.00 in Biofarm Bucure on November 3, 2024 and sell it today you would lose (1.00) from holding Biofarm Bucure or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Biofarm Bucure vs. Safetech Innovations SA
Performance |
| Timeline |
| Biofarm Bucure |
| Safetech Innovations |
Biofarm Bucure and Safetech Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofarm Bucure and Safetech Innovations
The main advantage of trading using opposite Biofarm Bucure and Safetech Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofarm Bucure position performs unexpectedly, Safetech Innovations 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 Safetech Innovations will offset losses from the drop in Safetech Innovations' long position.| Biofarm Bucure vs. Oil Terminal C | Biofarm Bucure vs. Antibiotice Ia | Biofarm Bucure vs. Aages SA | Biofarm Bucure vs. Alumil Rom Industry |
| Safetech Innovations vs. Patria Bank SA | Safetech Innovations vs. Turism Hotelur | Safetech Innovations vs. Compania Hoteliera InterContinental | Safetech Innovations vs. AROBS TRANSILVANIA SOFTWARE |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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