Correlation Between Precision BioSciences and BioLineRx
Can any of the company-specific risk be diversified away by investing in both Precision BioSciences and BioLineRx 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 Precision BioSciences and BioLineRx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision BioSciences and BioLineRx, you can compare the effects of market volatilities on Precision BioSciences and BioLineRx 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 Precision BioSciences with a short position of BioLineRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision BioSciences and BioLineRx.
Diversification Opportunities for Precision BioSciences and BioLineRx
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Precision and BioLineRx is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Precision BioSciences and BioLineRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLineRx and Precision BioSciences 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 Precision BioSciences are associated (or correlated) with BioLineRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLineRx has no effect on the direction of Precision BioSciences i.e., Precision BioSciences and BioLineRx go up and down completely randomly.
Pair Corralation between Precision BioSciences and BioLineRx
Given the investment horizon of 90 days Precision BioSciences is expected to under-perform the BioLineRx. But the stock apears to be less risky and, when comparing its historical volatility, Precision BioSciences is 1.18 times less risky than BioLineRx. The stock trades about -0.05 of its potential returns per unit of risk. The BioLineRx is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,440 in BioLineRx on November 2, 2024 and sell it today you would lose (2,083) from holding BioLineRx or give up 85.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Precision BioSciences vs. BioLineRx
Performance |
| Timeline |
| Precision BioSciences |
| BioLineRx |
Precision BioSciences and BioLineRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision BioSciences and BioLineRx
The main advantage of trading using opposite Precision BioSciences and BioLineRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision BioSciences position performs unexpectedly, BioLineRx 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 BioLineRx will offset losses from the drop in BioLineRx's long position.| Precision BioSciences vs. X4 Pharmaceuticals | Precision BioSciences vs. Acumen Pharmaceuticals | Precision BioSciences vs. Inozyme Pharma | Precision BioSciences vs. Terns Pharmaceuticals |
| BioLineRx vs. Ardelyx | BioLineRx vs. Lexicon Pharmaceuticals | BioLineRx vs. Seres Therapeutics | BioLineRx vs. Immunitybio |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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