Correlation Between Biomedix Incubator and Afcon Holdings
Can any of the company-specific risk be diversified away by investing in both Biomedix Incubator and Afcon Holdings 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 Biomedix Incubator and Afcon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomedix Incubator and Afcon Holdings, you can compare the effects of market volatilities on Biomedix Incubator and Afcon Holdings 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 Biomedix Incubator with a short position of Afcon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomedix Incubator and Afcon Holdings.
Diversification Opportunities for Biomedix Incubator and Afcon Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Biomedix and Afcon is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Biomedix Incubator and Afcon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afcon Holdings and Biomedix Incubator 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 Biomedix Incubator are associated (or correlated) with Afcon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afcon Holdings has no effect on the direction of Biomedix Incubator i.e., Biomedix Incubator and Afcon Holdings go up and down completely randomly.
Pair Corralation between Biomedix Incubator and Afcon Holdings
Assuming the 90 days trading horizon Biomedix Incubator is expected to generate 5.0 times less return on investment than Afcon Holdings. In addition to that, Biomedix Incubator is 2.04 times more volatile than Afcon Holdings. It trades about 0.01 of its total potential returns per unit of risk. Afcon Holdings is currently generating about 0.15 per unit of volatility. If you would invest 921,400 in Afcon Holdings on September 3, 2024 and sell it today you would earn a total of 366,600 from holding Afcon Holdings or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomedix Incubator vs. Afcon Holdings
Performance |
| Timeline |
| Biomedix Incubator |
| Afcon Holdings |
Biomedix Incubator and Afcon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomedix Incubator and Afcon Holdings
The main advantage of trading using opposite Biomedix Incubator and Afcon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomedix Incubator position performs unexpectedly, Afcon Holdings 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 Afcon Holdings will offset losses from the drop in Afcon Holdings' long position.| Biomedix Incubator vs. One Software Technologies | Biomedix Incubator vs. Mobile Max M | Biomedix Incubator vs. Clal Biotechnology Industries | Biomedix Incubator vs. Harel Insurance Investments |
| Afcon Holdings vs. Hilan | Afcon Holdings vs. Matrix | Afcon Holdings vs. AudioCodes | Afcon Holdings vs. Tadiran Hldg |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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