Correlation Between Biomea Fusion and Bionomics
Can any of the company-specific risk be diversified away by investing in both Biomea Fusion and Bionomics 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 Biomea Fusion and Bionomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomea Fusion and Bionomics Ltd ADR, you can compare the effects of market volatilities on Biomea Fusion and Bionomics 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 Biomea Fusion with a short position of Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomea Fusion and Bionomics.
Diversification Opportunities for Biomea Fusion and Bionomics
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biomea and Bionomics is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Biomea Fusion and Bionomics Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics ADR and Biomea Fusion 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 Biomea Fusion are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics ADR has no effect on the direction of Biomea Fusion i.e., Biomea Fusion and Bionomics go up and down completely randomly.
Pair Corralation between Biomea Fusion and Bionomics
Given the investment horizon of 90 days Biomea Fusion is expected to under-perform the Bionomics. But the stock apears to be less risky and, when comparing its historical volatility, Biomea Fusion is 8.34 times less risky than Bionomics. The stock trades about -0.66 of its potential returns per unit of risk. The Bionomics Ltd ADR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Bionomics Ltd ADR on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Bionomics Ltd ADR or generate 52.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomea Fusion vs. Bionomics Ltd ADR
Performance |
| Timeline |
| Biomea Fusion |
| Bionomics ADR |
Biomea Fusion and Bionomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomea Fusion and Bionomics
The main advantage of trading using opposite Biomea Fusion and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomea Fusion position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.| Biomea Fusion vs. Edgewise Therapeutics | Biomea Fusion vs. Werewolf Therapeutics | Biomea Fusion vs. Cullinan Oncology LLC | Biomea Fusion vs. Design Therapeutics |
| Bionomics vs. Accustem Sciences | Bionomics vs. Scisparc | Bionomics vs. Anebulo Pharmaceuticals | Bionomics vs. Pmv Pharmaceuticals |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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