Correlation Between Axim Biotechnologies and Biostage

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

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

Diversification Opportunities for Axim Biotechnologies and Biostage

0.64

Correlation Coefficient

Axim Biotechnologies  Biostage

Poor diversification

The 3 months correlation between Axim and Biostage is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Axim Biotechnologies and Biostage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biostage and Axim Biotechnologies 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 Axim Biotechnologies are associated (or correlated) with Biostage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biostage has no effect on the direction of Axim Biotechnologies i.e., Axim Biotechnologies and Biostage go up and down completely randomly.

Pair Corralation between Axim Biotechnologies and Biostage

If you would invest  2.00  in Axim Biotechnologies on September 15, 2024 and sell it today you would lose (1.80) from holding Axim Biotechnologies or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

Axim Biotechnologies  vs.  Biostage

Axim Biotechnologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axim Biotechnologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Axim Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Biostage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biostage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Biostage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Axim Biotechnologies and Biostage

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

The idea behind Axim Biotechnologies and Biostage 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.