Correlation Between Biotron and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Biotron and Dow Jones 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 Biotron and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotron Limited and Dow Jones Industrial, you can compare the effects of market volatilities on Biotron and Dow Jones 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 Biotron with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotron and Dow Jones.
Diversification Opportunities for Biotron and Dow Jones
Very good diversification
The 3 months correlation between Biotron and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Biotron Limited and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Biotron 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 Biotron Limited are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Biotron i.e., Biotron and Dow Jones go up and down completely randomly.
Pair Corralation between Biotron and Dow Jones
Assuming the 90 days horizon Biotron Limited is expected to generate 63.07 times more return on investment than Dow Jones. However, Biotron is 63.07 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1.94 in Biotron Limited on August 30, 2024 and sell it today you would lose (0.69) from holding Biotron Limited or give up 35.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biotron Limited vs. Dow Jones Industrial
Performance |
| Timeline |
Biotron and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Biotron Limited
Pair trading matchups for Biotron
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Biotron and Dow Jones
The main advantage of trading using opposite Biotron and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotron position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Biotron vs. biOasis Technologies | Biotron vs. Covalon Technologies | Biotron vs. Mosaic Immunoengineering | Biotron vs. Cellectis SA |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |