Correlation Between CSL and Biovaxys Technology

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

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

Diversification Opportunities for CSL and Biovaxys Technology

-0.43

Correlation Coefficient

CSL  Biovaxys Technology

Very good diversification

The 3 months correlation between CSL and Biovaxys is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Biovaxys Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovaxys Technology Corp and CSL 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 CSL Limited are associated (or correlated) with Biovaxys Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovaxys Technology Corp has no effect on the direction of CSL i.e., CSL and Biovaxys Technology go up and down completely randomly.

Pair Corralation between CSL and Biovaxys Technology

Assuming the 90 days horizon CSL Limited is expected to under-perform the Biovaxys Technology. But the pink sheet apears to be less risky and, when comparing its historical volatility, CSL Limited is 3.15 times less risky than Biovaxys Technology. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Biovaxys Technology Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4.48  in Biovaxys Technology Corp on September 12, 2024 and sell it today you would lose (0.50) from holding Biovaxys Technology Corp or give up 11.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

CSL Limited  vs.  Biovaxys Technology Corp

CSL Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL Limited 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 technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Biovaxys Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biovaxys Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Biovaxys Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CSL and Biovaxys Technology

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

The idea behind CSL Limited and Biovaxys Technology Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.