Correlation Between Gilead Sciences and BioAffinity Technologies
Can any of the company-specific risk be diversified away by investing in both Gilead Sciences and BioAffinity Technologies 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 Gilead Sciences and BioAffinity Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilead Sciences and bioAffinity Technologies Warrant, you can compare the effects of market volatilities on Gilead Sciences and BioAffinity Technologies 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 Gilead Sciences with a short position of BioAffinity Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilead Sciences and BioAffinity Technologies.
Diversification Opportunities for Gilead Sciences and BioAffinity Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gilead and BioAffinity is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gilead Sciences and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and Gilead Sciences 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 Gilead Sciences are associated (or correlated) with BioAffinity Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAffinity Technologies has no effect on the direction of Gilead Sciences i.e., Gilead Sciences and BioAffinity Technologies go up and down completely randomly.
Pair Corralation between Gilead Sciences and BioAffinity Technologies
Given the investment horizon of 90 days Gilead Sciences is expected to generate 4.22 times less return on investment than BioAffinity Technologies. But when comparing it to its historical volatility, Gilead Sciences is 26.48 times less risky than BioAffinity Technologies. It trades about 0.44 of its potential returns per unit of risk. bioAffinity Technologies Warrant is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 43.00 in bioAffinity Technologies Warrant on November 9, 2024 and sell it today you would lose (5.00) from holding bioAffinity Technologies Warrant or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Gilead Sciences vs. bioAffinity Technologies Warra
Performance |
| Timeline |
| Gilead Sciences |
| BioAffinity Technologies |
Gilead Sciences and BioAffinity Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilead Sciences and BioAffinity Technologies
The main advantage of trading using opposite Gilead Sciences and BioAffinity Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilead Sciences position performs unexpectedly, BioAffinity Technologies 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 BioAffinity Technologies will offset losses from the drop in BioAffinity Technologies' long position.| Gilead Sciences vs. Amgen Inc | Gilead Sciences vs. Merck Company | Gilead Sciences vs. AbbVie Inc | Gilead Sciences vs. Johnson Johnson |
| BioAffinity Technologies vs. bioAffinity Technologies, | BioAffinity Technologies vs. AAP Inc | BioAffinity Technologies vs. Discount Print USA | BioAffinity Technologies vs. China Dongsheng International |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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