Correlation Between Biosynex and ICeram SA

Can any of the company-specific risk be diversified away by investing in both Biosynex and ICeram SA 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 Biosynex and ICeram SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biosynex and ICeram SA, you can compare the effects of market volatilities on Biosynex and ICeram SA 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 Biosynex with a short position of ICeram SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biosynex and ICeram SA.

Diversification Opportunities for Biosynex and ICeram SA

0.78

Correlation Coefficient

Biosynex  ICeram SA

Poor diversification

The 3 months correlation between Biosynex and ICeram is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Biosynex and ICeram SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICeram SA and Biosynex 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 Biosynex are associated (or correlated) with ICeram SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICeram SA has no effect on the direction of Biosynex i.e., Biosynex and ICeram SA go up and down completely randomly.

Pair Corralation between Biosynex and ICeram SA

Assuming the 90 days trading horizon Biosynex is expected to under-perform the ICeram SA. In addition to that, Biosynex is 1.61 times more volatile than ICeram SA. It trades about -0.32 of its total potential returns per unit of risk. ICeram SA is currently generating about -0.1 per unit of volatility. If you would invest  51.00  in ICeram SA on September 24, 2024 and sell it today you would lose (11.00) from holding ICeram SA or give up 21.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Biosynex  vs.  ICeram SA

Biosynex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biosynex has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ICeram SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICeram SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Biosynex and ICeram SA

The main advantage of trading using opposite Biosynex and ICeram SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biosynex position performs unexpectedly, ICeram SA 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 ICeram SA will offset losses from the drop in ICeram SA's long position.

The idea behind Biosynex and ICeram SA 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..