Correlation Between BioLife Solutions and Becton Dickinson

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

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

Diversification Opportunities for BioLife Solutions and Becton Dickinson

-0.22

Correlation Coefficient

BioLife Solutions  Becton Dickinson

Very good diversification

The 3 months correlation between BioLife and Becton is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BioLife Solutions and Becton Dickinson and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becton Dickinson and BioLife Solutions 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 BioLife Solutions are associated (or correlated) with Becton Dickinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becton Dickinson has no effect on the direction of BioLife Solutions i.e., BioLife Solutions and Becton Dickinson go up and down completely randomly.

Pair Corralation between BioLife Solutions and Becton Dickinson

Given the investment horizon of 90 days BioLife Solutions is expected to generate 3.2 times more return on investment than Becton Dickinson. However, BioLife Solutions is 3.2 times more volatile than Becton Dickinson and. It trades about 0.07 of its potential returns per unit of risk. Becton Dickinson and is currently generating about -0.11 per unit of risk. If you would invest  2,443  in BioLife Solutions on September 1, 2024 and sell it today you would earn a total of  304.00  from holding BioLife Solutions or generate 12.44% return on investment over 90 days.

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

BioLife Solutions  vs.  Becton Dickinson and

BioLife Solutions

Risk-Adjusted Performance

5 of 100

Modest

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

Becton Dickinson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becton Dickinson and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BioLife Solutions and Becton Dickinson

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

The idea behind BioLife Solutions and Becton Dickinson and 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..