Correlation Between Poxel SA and Biosynex
Can any of the company-specific risk be diversified away by investing in both Poxel SA and Biosynex 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 Poxel SA and Biosynex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poxel SA and Biosynex, you can compare the effects of market volatilities on Poxel SA and Biosynex 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 Poxel SA with a short position of Biosynex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poxel SA and Biosynex.
Diversification Opportunities for Poxel SA and Biosynex
Very poor diversification
The 3 months correlation between Poxel and Biosynex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Poxel SA and Biosynex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biosynex and Poxel SA 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 Poxel SA are associated (or correlated) with Biosynex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biosynex has no effect on the direction of Poxel SA i.e., Poxel SA and Biosynex go up and down completely randomly.
Pair Corralation between Poxel SA and Biosynex
Assuming the 90 days trading horizon Poxel SA is expected to generate 1.72 times more return on investment than Biosynex. However, Poxel SA is 1.72 times more volatile than Biosynex. It trades about -0.02 of its potential returns per unit of risk. Biosynex is currently generating about -0.07 per unit of risk. If you would invest 62.00 in Poxel SA on September 2, 2024 and sell it today you would lose (43.00) from holding Poxel SA or give up 69.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poxel SA vs. Biosynex
Performance |
| Timeline |
| Poxel SA |
| Biosynex |
Poxel SA and Biosynex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poxel SA and Biosynex
The main advantage of trading using opposite Poxel SA and Biosynex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poxel SA position performs unexpectedly, Biosynex 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 Biosynex will offset losses from the drop in Biosynex's long position.The idea behind Poxel SA and Biosynex pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Biosynex vs. Novacyt | Biosynex vs. Eurobio Scientific SA | Biosynex vs. Biophytis SA | Biosynex vs. Intrasense |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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