Correlation Between Ventana Biotech and New Generation
Can any of the company-specific risk be diversified away by investing in both Ventana Biotech and New Generation 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 Ventana Biotech and New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ventana Biotech and New Generation Consumer, you can compare the effects of market volatilities on Ventana Biotech and New Generation 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 Ventana Biotech with a short position of New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ventana Biotech and New Generation.
Diversification Opportunities for Ventana Biotech and New Generation
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ventana and New is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ventana Biotech and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer and Ventana Biotech 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 Ventana Biotech are associated (or correlated) with New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of Ventana Biotech i.e., Ventana Biotech and New Generation go up and down completely randomly.
Pair Corralation between Ventana Biotech and New Generation
Given the investment horizon of 90 days Ventana Biotech is expected to generate 3.67 times more return on investment than New Generation. However, Ventana Biotech is 3.67 times more volatile than New Generation Consumer. It trades about 0.06 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.05 per unit of risk. If you would invest 0.49 in Ventana Biotech on August 26, 2024 and sell it today you would lose (0.45) from holding Ventana Biotech or give up 91.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ventana Biotech vs. New Generation Consumer
Performance |
| Timeline |
| Ventana Biotech |
| New Generation Consumer |
Ventana Biotech and New Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ventana Biotech and New Generation
The main advantage of trading using opposite Ventana Biotech and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ventana Biotech position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation's long position.| Ventana Biotech vs. Active Health Foods | Ventana Biotech vs. Gold Ent Group | Ventana Biotech vs. Profitable Develop | Ventana Biotech vs. American Leisure Holdings |
| New Generation vs. Absolute Health and | New Generation vs. China Health Management | New Generation vs. Embrace Change Acquisition | New Generation vs. TransAKT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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