Correlation Between Netz Hotels and BioLine RX
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and BioLine RX 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 Netz Hotels and BioLine RX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and BioLine RX, you can compare the effects of market volatilities on Netz Hotels and BioLine RX 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 Netz Hotels with a short position of BioLine RX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and BioLine RX.
Diversification Opportunities for Netz Hotels and BioLine RX
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netz and BioLine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and BioLine RX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLine RX and Netz Hotels 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 Netz Hotels are associated (or correlated) with BioLine RX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLine RX has no effect on the direction of Netz Hotels i.e., Netz Hotels and BioLine RX go up and down completely randomly.
Pair Corralation between Netz Hotels and BioLine RX
Assuming the 90 days trading horizon Netz Hotels is expected to generate 1.48 times more return on investment than BioLine RX. However, Netz Hotels is 1.48 times more volatile than BioLine RX. It trades about 0.02 of its potential returns per unit of risk. BioLine RX is currently generating about -0.01 per unit of risk. If you would invest 5,000 in Netz Hotels on August 29, 2024 and sell it today you would lose (1,650) from holding Netz Hotels or give up 33.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netz Hotels vs. BioLine RX
Performance |
| Timeline |
| Netz Hotels |
| BioLine RX |
Netz Hotels and BioLine RX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netz Hotels and BioLine RX
The main advantage of trading using opposite Netz Hotels and BioLine RX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, BioLine RX 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 BioLine RX will offset losses from the drop in BioLine RX's long position.| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. B Communications | Netz Hotels vs. Holmes Place International | Netz Hotels vs. Nova |
| BioLine RX vs. Evogene | BioLine RX vs. Enlivex Therapeutics | BioLine RX vs. Kamada | BioLine RX vs. Compugen |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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