Correlation Between CSL and Bonus BioGroup
Can any of the company-specific risk be diversified away by investing in both CSL and Bonus BioGroup 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 CSL and Bonus BioGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Bonus BioGroup, you can compare the effects of market volatilities on CSL and Bonus BioGroup 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 CSL with a short position of Bonus BioGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Bonus BioGroup.
Diversification Opportunities for CSL and Bonus BioGroup
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSL and Bonus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Bonus BioGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonus BioGroup and CSL 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 CSL are associated (or correlated) with Bonus BioGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonus BioGroup has no effect on the direction of CSL i.e., CSL and Bonus BioGroup go up and down completely randomly.
Pair Corralation between CSL and Bonus BioGroup
Assuming the 90 days horizon CSL is expected to generate 573.15 times less return on investment than Bonus BioGroup. But when comparing it to its historical volatility, CSL is 72.73 times less risky than Bonus BioGroup. It trades about 0.01 of its potential returns per unit of risk. Bonus BioGroup is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Bonus BioGroup on September 12, 2024 and sell it today you would lose (2.00) from holding Bonus BioGroup or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
CSL vs. Bonus BioGroup
Performance |
| Timeline |
| CSL |
| Bonus BioGroup |
CSL and Bonus BioGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Bonus BioGroup
The main advantage of trading using opposite CSL and Bonus BioGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, Bonus BioGroup 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 Bonus BioGroup will offset losses from the drop in Bonus BioGroup's long position.| CSL vs. Sino Biopharmaceutical Ltd | CSL vs. Defence Therapeutics | CSL vs. Aileron Therapeutics | CSL vs. Enlivex Therapeutics |
| Bonus BioGroup vs. Biotron Limited | Bonus BioGroup vs. biOasis Technologies | Bonus BioGroup vs. Covalon Technologies | Bonus BioGroup vs. Mosaic Immunoengineering |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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