Correlation Between Biovaxys Technology and Wesana Health

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

By analyzing existing cross correlation between Biovaxys Technology Corp and Wesana Health Holdings, you can compare the effects of market volatilities on Biovaxys Technology and Wesana Health 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 Biovaxys Technology with a short position of Wesana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biovaxys Technology and Wesana Health.

Diversification Opportunities for Biovaxys Technology and Wesana Health

-0.1

Correlation Coefficient

Biovaxys Technology  Wesana Health

Good diversification

The 3 months correlation between Biovaxys and Wesana is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Biovaxys Technology Corp and Wesana Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesana Health Holdings and Biovaxys Technology 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 Biovaxys Technology Corp are associated (or correlated) with Wesana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesana Health Holdings has no effect on the direction of Biovaxys Technology i.e., Biovaxys Technology and Wesana Health go up and down completely randomly.

Pair Corralation between Biovaxys Technology and Wesana Health

Assuming the 90 days horizon Biovaxys Technology is expected to generate 19.08 times less return on investment than Wesana Health. But when comparing it to its historical volatility, Biovaxys Technology Corp is 5.5 times less risky than Wesana Health. It trades about 0.05 of its potential returns per unit of risk. Wesana Health Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.79  in Wesana Health Holdings on September 4, 2024 and sell it today you would earn a total of  0.18  from holding Wesana Health Holdings or generate 22.78% return on investment over 90 days.

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

Biovaxys Technology Corp  vs.  Wesana Health Holdings

Biovaxys Technology Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biovaxys Technology Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Biovaxys Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Wesana Health Holdings

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wesana Health Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Wesana Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biovaxys Technology and Wesana Health

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

The idea behind Biovaxys Technology Corp and Wesana Health Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.