Correlation Between Bio Meat and Terminal X

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

By analyzing existing cross correlation between Bio Meat Foodtech and Terminal X Online, you can compare the effects of market volatilities on Bio Meat and Terminal X 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 Bio Meat with a short position of Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Meat and Terminal X.

Diversification Opportunities for Bio Meat and Terminal X

-0.56

Correlation Coefficient

Bio Meat  Terminal X

Excellent diversification

The 3 months correlation between Bio and Terminal is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bio Meat Foodtech and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online and Bio Meat 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 Bio Meat Foodtech are associated (or correlated) with Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Bio Meat i.e., Bio Meat and Terminal X go up and down completely randomly.

Pair Corralation between Bio Meat and Terminal X

Assuming the 90 days trading horizon Bio Meat Foodtech is expected to under-perform the Terminal X. In addition to that, Bio Meat is 1.92 times more volatile than Terminal X Online. It trades about -0.09 of its total potential returns per unit of risk. Terminal X Online is currently generating about 0.29 per unit of volatility. If you would invest  29,500  in Terminal X Online on September 26, 2024 and sell it today you would earn a total of  20,860  from holding Terminal X Online or generate 70.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bio Meat Foodtech  vs.  Terminal X Online

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bio Meat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Terminal X Online

Risk-Adjusted Performance

44 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Terminal X Online are ranked lower than 44 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Terminal X sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Meat and Terminal X

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

The idea behind Bio Meat Foodtech and Terminal X Online 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.