Correlation Between BioLine RX and Evogene
Can any of the company-specific risk be diversified away by investing in both BioLine RX and Evogene 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 BioLine RX and Evogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioLine RX and Evogene, you can compare the effects of market volatilities on BioLine RX and Evogene 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 BioLine RX with a short position of Evogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLine RX and Evogene.
Diversification Opportunities for BioLine RX and Evogene
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BioLine and Evogene is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BioLine RX and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene and BioLine RX 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 BioLine RX are associated (or correlated) with Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of BioLine RX i.e., BioLine RX and Evogene go up and down completely randomly.
Pair Corralation between BioLine RX and Evogene
Assuming the 90 days trading horizon BioLine RX is expected to generate 2.7 times more return on investment than Evogene. However, BioLine RX is 2.7 times more volatile than Evogene. It trades about -0.2 of its potential returns per unit of risk. Evogene is currently generating about -0.63 per unit of risk. If you would invest 1,220 in BioLine RX on August 29, 2024 and sell it today you would lose (420.00) from holding BioLine RX or give up 34.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioLine RX vs. Evogene
Performance |
| Timeline |
| BioLine RX |
| Evogene |
BioLine RX and Evogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioLine RX and Evogene
The main advantage of trading using opposite BioLine RX and Evogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioLine RX position performs unexpectedly, Evogene 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 Evogene will offset losses from the drop in Evogene's long position.| BioLine RX vs. Evogene | BioLine RX vs. Enlivex Therapeutics | BioLine RX vs. Kamada | BioLine RX vs. Compugen |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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