Correlation Between Biome Technologies and Ondine Biomedical
Can any of the company-specific risk be diversified away by investing in both Biome Technologies and Ondine Biomedical 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 Biome Technologies and Ondine Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biome Technologies Plc and Ondine Biomedical, you can compare the effects of market volatilities on Biome Technologies and Ondine Biomedical 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 Biome Technologies with a short position of Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biome Technologies and Ondine Biomedical.
Diversification Opportunities for Biome Technologies and Ondine Biomedical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biome and Ondine is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Biome Technologies Plc and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical and Biome Technologies 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 Biome Technologies Plc are associated (or correlated) with Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Biome Technologies i.e., Biome Technologies and Ondine Biomedical go up and down completely randomly.
Pair Corralation between Biome Technologies and Ondine Biomedical
Assuming the 90 days trading horizon Biome Technologies Plc is expected to under-perform the Ondine Biomedical. In addition to that, Biome Technologies is 1.05 times more volatile than Ondine Biomedical. It trades about -0.08 of its total potential returns per unit of risk. Ondine Biomedical is currently generating about -0.01 per unit of volatility. If you would invest 2,050 in Ondine Biomedical on September 24, 2024 and sell it today you would lose (1,200) from holding Ondine Biomedical or give up 58.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biome Technologies Plc vs. Ondine Biomedical
Performance |
| Timeline |
| Biome Technologies Plc |
| Ondine Biomedical |
Biome Technologies and Ondine Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biome Technologies and Ondine Biomedical
The main advantage of trading using opposite Biome Technologies and Ondine Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biome Technologies position performs unexpectedly, Ondine Biomedical 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 Ondine Biomedical will offset losses from the drop in Ondine Biomedical's long position.| Biome Technologies vs. Givaudan SA | Biome Technologies vs. Antofagasta PLC | Biome Technologies vs. Ferrexpo PLC | Biome Technologies vs. Atalaya Mining |
| Ondine Biomedical vs. Coor Service Management | Ondine Biomedical vs. Tatton Asset Management | Ondine Biomedical vs. SMA Solar Technology | Ondine Biomedical vs. Playtech Plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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