Correlation Between Guided Therapeutics and Biostage
Can any of the company-specific risk be diversified away by investing in both Guided Therapeutics and Biostage 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 Guided Therapeutics and Biostage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guided Therapeutics and Biostage, you can compare the effects of market volatilities on Guided Therapeutics and Biostage 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 Guided Therapeutics with a short position of Biostage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guided Therapeutics and Biostage.
Diversification Opportunities for Guided Therapeutics and Biostage
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guided and Biostage is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guided Therapeutics and Biostage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biostage and Guided Therapeutics 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 Guided Therapeutics are associated (or correlated) with Biostage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biostage has no effect on the direction of Guided Therapeutics i.e., Guided Therapeutics and Biostage go up and down completely randomly.
Pair Corralation between Guided Therapeutics and Biostage
Given the investment horizon of 90 days Guided Therapeutics is expected to generate 3.96 times more return on investment than Biostage. However, Guided Therapeutics is 3.96 times more volatile than Biostage. It trades about 0.07 of its potential returns per unit of risk. Biostage is currently generating about -0.06 per unit of risk. 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 |
Guided Therapeutics vs. Biostage
Performance |
| Timeline |
| Guided Therapeutics |
| Biostage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guided Therapeutics and Biostage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guided Therapeutics and Biostage
The main advantage of trading using opposite Guided Therapeutics and Biostage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guided Therapeutics position performs unexpectedly, Biostage 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 Biostage will offset losses from the drop in Biostage's long position.| Guided Therapeutics vs. Nephros | Guided Therapeutics vs. Intelgenx Technologs | Guided Therapeutics vs. SANUWAVE Health | Guided Therapeutics vs. Spectrascience New |
| Biostage vs. Biotron Limited | Biostage vs. biOasis Technologies | Biostage vs. Covalon Technologies | Biostage 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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