Correlation Between Biophytis and Glob Bioenergi

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

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

Diversification Opportunities for Biophytis and Glob Bioenergi

0.69

Correlation Coefficient

Biophytis  Glob Bioenergi

Poor diversification

The 3 months correlation between Biophytis and Glob is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and Glob Bioenergi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glob Bioenergi and Biophytis 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 Biophytis SA are associated (or correlated) with Glob Bioenergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glob Bioenergi has no effect on the direction of Biophytis i.e., Biophytis and Glob Bioenergi go up and down completely randomly.

Pair Corralation between Biophytis and Glob Bioenergi

Assuming the 90 days trading horizon Biophytis SA is expected to under-perform the Glob Bioenergi. But the stock apears to be less risky and, when comparing its historical volatility, Biophytis SA is 1.03 times less risky than Glob Bioenergi. The stock trades about -0.12 of its potential returns per unit of risk. The Glob Bioenergi is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  290.00  in Glob Bioenergi on September 27, 2024 and sell it today you would lose (205.00) from holding Glob Bioenergi or give up 70.69% of portfolio value over 90 days.

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

Biophytis SA  vs.  Glob Bioenergi

Biophytis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biophytis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Glob Bioenergi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glob Bioenergi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Glob Bioenergi is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Biophytis and Glob Bioenergi

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

The idea behind Biophytis SA and Glob Bioenergi 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.