Correlation Between UV Germi and BIO UV

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

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

Diversification Opportunities for UV Germi and BIO UV

0.77

Correlation Coefficient

UV Germi  BIO UV

Poor diversification

The 3 months correlation between ALUVI and BIO is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding UV Germi SA and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and UV Germi 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 UV Germi SA are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of UV Germi i.e., UV Germi and BIO UV go up and down completely randomly.

Pair Corralation between UV Germi and BIO UV

Assuming the 90 days trading horizon UV Germi is expected to generate 36.81 times less return on investment than BIO UV. In addition to that, UV Germi is 1.12 times more volatile than BIO UV Group. It trades about 0.0 of its total potential returns per unit of risk. BIO UV Group is currently generating about 0.05 per unit of volatility. If you would invest  198.00  in BIO UV Group on September 28, 2024 and sell it today you would earn a total of  15.00  from holding BIO UV Group or generate 7.58% return on investment over 90 days.

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

UV Germi SA  vs.  BIO UV Group

UV Germi SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

BIO UV Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIO UV Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BIO UV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UV Germi and BIO UV

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

The idea behind UV Germi SA and BIO UV Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.