Correlation Between Biotron and Wesana Health
Can any of the company-specific risk be diversified away by investing in both Biotron and Wesana Health 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 Wesana Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotron Limited and Wesana Health Holdings, you can compare the effects of market volatilities on Biotron and Wesana Health 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 Wesana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotron and Wesana Health.
Diversification Opportunities for Biotron and Wesana Health
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Biotron and Wesana is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Biotron Limited and Wesana Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesana Health Holdings 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 Wesana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesana Health Holdings has no effect on the direction of Biotron i.e., Biotron and Wesana Health go up and down completely randomly.
Pair Corralation between Biotron and Wesana Health
Assuming the 90 days horizon Biotron is expected to generate 11.44 times less return on investment than Wesana Health. But when comparing it to its historical volatility, Biotron Limited is 3.01 times less risky than Wesana Health. It trades about 0.04 of its potential returns per unit of risk. Wesana Health Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2.70 in Wesana Health Holdings on November 4, 2024 and sell it today you would earn a total of 1.05 from holding Wesana Health Holdings or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Biotron Limited vs. Wesana Health Holdings
Performance |
| Timeline |
| Biotron Limited |
| Wesana Health Holdings |
Biotron and Wesana Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotron and Wesana Health
The main advantage of trading using opposite Biotron and Wesana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotron position performs unexpectedly, Wesana Health 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 Wesana Health will offset losses from the drop in Wesana Health's long position.| Biotron vs. biOasis Technologies | Biotron vs. Covalon Technologies | Biotron vs. Mosaic Immunoengineering | Biotron vs. Cellectis SA |
| Wesana Health vs. Revelation Biosciences | Wesana Health vs. Awakn Life Sciences | Wesana Health vs. HAVN Life Sciences | Wesana Health vs. Silo Pharma |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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