Correlation Between Biostage and Guided Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biostage and Guided Therapeutics 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 Biostage and Guided Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biostage and Guided Therapeutics, you can compare the effects of market volatilities on Biostage and Guided Therapeutics 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 Biostage with a short position of Guided Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biostage and Guided Therapeutics.
Diversification Opportunities for Biostage and Guided Therapeutics
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biostage and Guided is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Biostage and Guided Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guided Therapeutics and Biostage 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 Biostage are associated (or correlated) with Guided Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guided Therapeutics has no effect on the direction of Biostage i.e., Biostage and Guided Therapeutics go up and down completely randomly.
Pair Corralation between Biostage and Guided Therapeutics
Given the investment horizon of 90 days Biostage is expected to under-perform the Guided Therapeutics. But the otc stock apears to be less risky and, when comparing its historical volatility, Biostage is 3.96 times less risky than Guided Therapeutics. The otc stock trades about -0.06 of its potential returns per unit of risk. The Guided Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Guided Therapeutics on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Guided Therapeutics or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 7.8% |
| Values | Daily Returns |
Biostage vs. Guided Therapeutics
Performance |
| Timeline |
| Biostage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guided Therapeutics |
Biostage and Guided Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biostage and Guided Therapeutics
The main advantage of trading using opposite Biostage and Guided Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biostage position performs unexpectedly, Guided Therapeutics 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 Guided Therapeutics will offset losses from the drop in Guided Therapeutics' long position.| Biostage vs. Biotron Limited | Biostage vs. biOasis Technologies | Biostage vs. Covalon Technologies | Biostage vs. Mosaic Immunoengineering |
| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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