Correlation Between Bion Environmental and Energy Recovery
Can any of the company-specific risk be diversified away by investing in both Bion Environmental and Energy Recovery 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 Bion Environmental and Energy Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bion Environmental Technologies and Energy Recovery, you can compare the effects of market volatilities on Bion Environmental and Energy Recovery 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 Bion Environmental with a short position of Energy Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bion Environmental and Energy Recovery.
Diversification Opportunities for Bion Environmental and Energy Recovery
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bion and Energy is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bion Environmental Technologie and Energy Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Recovery and Bion Environmental 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 Bion Environmental Technologies are associated (or correlated) with Energy Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Recovery has no effect on the direction of Bion Environmental i.e., Bion Environmental and Energy Recovery go up and down completely randomly.
Pair Corralation between Bion Environmental and Energy Recovery
Given the investment horizon of 90 days Bion Environmental Technologies is expected to generate 1.59 times more return on investment than Energy Recovery. However, Bion Environmental is 1.59 times more volatile than Energy Recovery. It trades about -0.06 of its potential returns per unit of risk. Energy Recovery is currently generating about -0.12 per unit of risk. If you would invest 26.00 in Bion Environmental Technologies on August 31, 2024 and sell it today you would lose (4.00) from holding Bion Environmental Technologies or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bion Environmental Technologie vs. Energy Recovery
Performance |
| Timeline |
| Bion Environmental |
| Energy Recovery |
Bion Environmental and Energy Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bion Environmental and Energy Recovery
The main advantage of trading using opposite Bion Environmental and Energy Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bion Environmental position performs unexpectedly, Energy Recovery 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 Energy Recovery will offset losses from the drop in Energy Recovery's long position.| Bion Environmental vs. Seychelle Environmtl | Bion Environmental vs. Energy and Water | Bion Environmental vs. One World Universe | Bion Environmental vs. Vow ASA |
| Energy Recovery vs. Zurn Elkay Water | Energy Recovery vs. CECO Environmental Corp | Energy Recovery vs. 374Water Common Stock | Energy Recovery vs. Federal Signal |
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 Correlations module to find global opportunities by holding instruments from different markets.
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