Correlation Between Biomedix Incubator and Baran
Can any of the company-specific risk be diversified away by investing in both Biomedix Incubator and Baran 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 Baran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomedix Incubator and Baran Group, you can compare the effects of market volatilities on Biomedix Incubator and Baran 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 Baran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomedix Incubator and Baran.
Diversification Opportunities for Biomedix Incubator and Baran
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Biomedix and Baran is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Biomedix Incubator and Baran Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baran Group 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 Baran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baran Group has no effect on the direction of Biomedix Incubator i.e., Biomedix Incubator and Baran go up and down completely randomly.
Pair Corralation between Biomedix Incubator and Baran
Assuming the 90 days trading horizon Biomedix Incubator is expected to generate 1.6 times less return on investment than Baran. In addition to that, Biomedix Incubator is 2.52 times more volatile than Baran Group. It trades about 0.07 of its total potential returns per unit of risk. Baran Group is currently generating about 0.29 per unit of volatility. If you would invest 118,000 in Baran Group on August 28, 2024 and sell it today you would earn a total of 32,000 from holding Baran Group or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomedix Incubator vs. Baran Group
Performance |
| Timeline |
| Biomedix Incubator |
| Baran Group |
Biomedix Incubator and Baran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomedix Incubator and Baran
The main advantage of trading using opposite Biomedix Incubator and Baran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomedix Incubator position performs unexpectedly, Baran 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 Baran will offset losses from the drop in Baran's long position.| Biomedix Incubator vs. Nice | Biomedix Incubator vs. The Gold Bond | Biomedix Incubator vs. Bank Leumi Le Israel | Biomedix Incubator vs. ICL Israel Chemicals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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