Correlation Between Biotechnology Fund and Europe 125x
Can any of the company-specific risk be diversified away by investing in both Biotechnology Fund and Europe 125x 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 Biotechnology Fund and Europe 125x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotechnology Fund Class and Europe 125x Strategy, you can compare the effects of market volatilities on Biotechnology Fund and Europe 125x 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 Biotechnology Fund with a short position of Europe 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotechnology Fund and Europe 125x.
Diversification Opportunities for Biotechnology Fund and Europe 125x
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIOTECHNOLOGY and Europe is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Biotechnology Fund Class and Europe 125x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europe 125x Strategy and Biotechnology Fund 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 Biotechnology Fund Class are associated (or correlated) with Europe 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europe 125x Strategy has no effect on the direction of Biotechnology Fund i.e., Biotechnology Fund and Europe 125x go up and down completely randomly.
Pair Corralation between Biotechnology Fund and Europe 125x
Assuming the 90 days horizon Biotechnology Fund Class is expected to under-perform the Europe 125x. In addition to that, Biotechnology Fund is 1.22 times more volatile than Europe 125x Strategy. It trades about -0.01 of its total potential returns per unit of risk. Europe 125x Strategy is currently generating about 0.03 per unit of volatility. If you would invest 7,204 in Europe 125x Strategy on October 20, 2024 and sell it today you would earn a total of 775.00 from holding Europe 125x Strategy or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biotechnology Fund Class vs. Europe 125x Strategy
Performance |
| Timeline |
| Biotechnology Fund Class |
| Europe 125x Strategy |
Biotechnology Fund and Europe 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotechnology Fund and Europe 125x
The main advantage of trading using opposite Biotechnology Fund and Europe 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotechnology Fund position performs unexpectedly, Europe 125x 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 Europe 125x will offset losses from the drop in Europe 125x's long position.| Biotechnology Fund vs. Fidelity Vertible Securities | Biotechnology Fund vs. Mainstay Vertible Fund | Biotechnology Fund vs. Invesco Vertible Securities | Biotechnology Fund vs. Putnam Vertible Securities |
| Europe 125x vs. Principal Fds Money | Europe 125x vs. John Hancock Money | Europe 125x vs. Ab Government Exchange | Europe 125x vs. Cref Money Market |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |