Correlation Between Biomedix Incubator and Dan Hotels
Can any of the company-specific risk be diversified away by investing in both Biomedix Incubator and Dan Hotels 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 Dan Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomedix Incubator and Dan Hotels, you can compare the effects of market volatilities on Biomedix Incubator and Dan Hotels 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 Dan Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomedix Incubator and Dan Hotels.
Diversification Opportunities for Biomedix Incubator and Dan Hotels
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biomedix and Dan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Biomedix Incubator and Dan Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dan Hotels 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 Dan Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dan Hotels has no effect on the direction of Biomedix Incubator i.e., Biomedix Incubator and Dan Hotels go up and down completely randomly.
Pair Corralation between Biomedix Incubator and Dan Hotels
Assuming the 90 days trading horizon Biomedix Incubator is expected to under-perform the Dan Hotels. In addition to that, Biomedix Incubator is 3.64 times more volatile than Dan Hotels. It trades about -0.11 of its total potential returns per unit of risk. Dan Hotels is currently generating about -0.08 per unit of volatility. If you would invest 231,800 in Dan Hotels on August 29, 2024 and sell it today you would lose (5,300) from holding Dan Hotels or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomedix Incubator vs. Dan Hotels
Performance |
| Timeline |
| Biomedix Incubator |
| Dan Hotels |
Biomedix Incubator and Dan Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomedix Incubator and Dan Hotels
The main advantage of trading using opposite Biomedix Incubator and Dan Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomedix Incubator position performs unexpectedly, Dan Hotels 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 Dan Hotels will offset losses from the drop in Dan Hotels' 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 |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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