Correlation Between Bio Rad and SINTX Technologies

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

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

Diversification Opportunities for Bio Rad and SINTX Technologies

-0.36

Correlation Coefficient

Bio Rad  SINTX Technologies

Very good diversification

The 3 months correlation between Bio and SINTX is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bio Rad Laboratories and SINTX Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINTX Technologies and Bio Rad 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 Rad Laboratories are associated (or correlated) with SINTX Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINTX Technologies has no effect on the direction of Bio Rad i.e., Bio Rad and SINTX Technologies go up and down completely randomly.

Pair Corralation between Bio Rad and SINTX Technologies

Considering the 90-day investment horizon Bio Rad Laboratories is expected to generate 0.18 times more return on investment than SINTX Technologies. However, Bio Rad Laboratories is 5.55 times less risky than SINTX Technologies. It trades about -0.01 of its potential returns per unit of risk. SINTX Technologies is currently generating about -0.05 per unit of risk. If you would invest  41,828  in Bio Rad Laboratories on August 31, 2024 and sell it today you would lose (7,980) from holding Bio Rad Laboratories or give up 19.08% of portfolio value over 90 days.

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

Bio Rad Laboratories  vs.  SINTX Technologies

Bio Rad Laboratories

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Rad Laboratories are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Bio Rad is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

SINTX Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SINTX Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SINTX Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Rad and SINTX Technologies

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

The idea behind Bio Rad Laboratories and SINTX Technologies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.