Correlation Between Bonus Biogroup and Aerodrome

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

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

Diversification Opportunities for Bonus Biogroup and Aerodrome

-0.63

Correlation Coefficient

Bonus Biogroup  Aerodrome

Excellent diversification

The 3 months correlation between Bonus and Aerodrome is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bonus Biogroup and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group and Bonus Biogroup 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 Bonus Biogroup are associated (or correlated) with Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Bonus Biogroup i.e., Bonus Biogroup and Aerodrome go up and down completely randomly.

Pair Corralation between Bonus Biogroup and Aerodrome

Assuming the 90 days trading horizon Bonus Biogroup is expected to under-perform the Aerodrome. But the stock apears to be less risky and, when comparing its historical volatility, Bonus Biogroup is 7.36 times less risky than Aerodrome. The stock trades about -0.21 of its potential returns per unit of risk. The Aerodrome Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,730  in Aerodrome Group on September 16, 2024 and sell it today you would earn a total of  3,490  from holding Aerodrome Group or generate 93.57% return on investment over 90 days.

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

Bonus Biogroup  vs.  Aerodrome Group

Bonus Biogroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonus Biogroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aerodrome Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aerodrome Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aerodrome sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bonus Biogroup and Aerodrome

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

The idea behind Bonus Biogroup and Aerodrome 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.