Correlation Between Bion Environmental and Molekule

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

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

Diversification Opportunities for Bion Environmental and Molekule

-0.19

Correlation Coefficient

Bion Environmental  Molekule

Good diversification

The 3 months correlation between Bion and Molekule is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bion Environmental Technologie and Molekule Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molekule Group and Bion Environmental 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 Bion Environmental Technologies are associated (or correlated) with Molekule. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molekule Group has no effect on the direction of Bion Environmental i.e., Bion Environmental and Molekule go up and down completely randomly.

Pair Corralation between Bion Environmental and Molekule

If you would invest  20.00  in Bion Environmental Technologies on September 21, 2024 and sell it today you would lose (3.00) from holding Bion Environmental Technologies or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Bion Environmental Technologie  vs.  Molekule Group

Bion Environmental

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bion Environmental Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Bion Environmental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Molekule Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molekule Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Molekule is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bion Environmental and Molekule

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

The idea behind Bion Environmental Technologies and Molekule Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.