Correlation Between Lupatech and Bio Techne
Can any of the company-specific risk be diversified away by investing in both Lupatech and Bio Techne 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 Lupatech and Bio Techne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Bio Techne, you can compare the effects of market volatilities on Lupatech and Bio Techne 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 Lupatech with a short position of Bio Techne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Bio Techne.
Diversification Opportunities for Lupatech and Bio Techne
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lupatech and Bio is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Bio Techne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Techne and Lupatech 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 Lupatech SA are associated (or correlated) with Bio Techne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Techne has no effect on the direction of Lupatech i.e., Lupatech and Bio Techne go up and down completely randomly.
Pair Corralation between Lupatech and Bio Techne
Assuming the 90 days trading horizon Lupatech SA is expected to generate 1.1 times more return on investment than Bio Techne. However, Lupatech is 1.1 times more volatile than Bio Techne. It trades about 0.03 of its potential returns per unit of risk. Bio Techne is currently generating about -0.01 per unit of risk. If you would invest 140.00 in Lupatech SA on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Lupatech SA or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Lupatech SA vs. Bio Techne
Performance |
| Timeline |
| Lupatech SA |
| Bio Techne |
Lupatech and Bio Techne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Bio Techne
The main advantage of trading using opposite Lupatech and Bio Techne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, Bio Techne 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 Bio Techne will offset losses from the drop in Bio Techne's long position.| Lupatech vs. Mitsubishi UFJ Financial | Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Toyota Motor | Lupatech vs. Banco Santander Chile |
| Bio Techne vs. Fras le SA | Bio Techne vs. Clave Indices De | Bio Techne vs. BTG Pactual Logstica | Bio Techne vs. Telefonaktiebolaget LM Ericsson |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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