Correlation Between Bio View and Endymed

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

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

Diversification Opportunities for Bio View and Endymed

-0.49

Correlation Coefficient

Bio View  Endymed

Very good diversification

The 3 months correlation between Bio and Endymed is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bio View and Endymed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endymed and Bio View 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 View are associated (or correlated) with Endymed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endymed has no effect on the direction of Bio View i.e., Bio View and Endymed go up and down completely randomly.

Pair Corralation between Bio View and Endymed

Assuming the 90 days trading horizon Bio View is expected to generate 1.6 times more return on investment than Endymed. However, Bio View is 1.6 times more volatile than Endymed. It trades about 0.21 of its potential returns per unit of risk. Endymed is currently generating about -0.03 per unit of risk. If you would invest  2,530  in Bio View on September 28, 2024 and sell it today you would earn a total of  360.00  from holding Bio View or generate 14.23% return on investment over 90 days.

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

Bio View  vs.  Endymed

Bio View

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio View are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bio View sustained solid returns over the last few months and may actually be approaching a breakup point.

Endymed

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endymed are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Endymed sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio View and Endymed

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

The idea behind Bio View and Endymed 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.