Correlation Between NYSE Composite and Bionomics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Bionomics 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 NYSE Composite and Bionomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Bionomics Limited, you can compare the effects of market volatilities on NYSE Composite and Bionomics 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 NYSE Composite with a short position of Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Bionomics.
Diversification Opportunities for NYSE Composite and Bionomics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Bionomics is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited and NYSE Composite 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 NYSE Composite are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Bionomics go up and down completely randomly.
Pair Corralation between NYSE Composite and Bionomics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 79.37 times less return on investment than Bionomics. But when comparing it to its historical volatility, NYSE Composite is 51.56 times less risky than Bionomics. It trades about 0.08 of its potential returns per unit of risk. Bionomics Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Bionomics Limited on September 3, 2024 and sell it today you would lose (2.19) from holding Bionomics Limited or give up 62.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
NYSE Composite vs. Bionomics Limited
Performance |
| Timeline |
NYSE Composite and Bionomics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Bionomics Limited
Pair trading matchups for Bionomics
Pair Trading with NYSE Composite and Bionomics
The main advantage of trading using opposite NYSE Composite and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Bionomics vs. BetterLife Pharma | Bionomics vs. Entheon Biomedical Corp | Bionomics vs. Pharmather Holdings | Bionomics vs. Intelgenx Technologs |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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