Correlation Between Fortress Biotech and Bio Path

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and Bio Path 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 Fortress Biotech and Bio Path into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech and Bio Path Holdings, you can compare the effects of market volatilities on Fortress Biotech and Bio Path 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 Fortress Biotech with a short position of Bio Path. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and Bio Path.

Diversification Opportunities for Fortress Biotech and Bio Path

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fortress and Bio is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech and Bio Path Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Path Holdings and Fortress Biotech 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 Fortress Biotech are associated (or correlated) with Bio Path. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Path Holdings has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and Bio Path go up and down completely randomly.

Pair Corralation between Fortress Biotech and Bio Path

Given the investment horizon of 90 days Fortress Biotech is expected to generate 0.76 times more return on investment than Bio Path. However, Fortress Biotech is 1.31 times less risky than Bio Path. It trades about 0.01 of its potential returns per unit of risk. Bio Path Holdings is currently generating about -0.07 per unit of risk. If you would invest  192.00  in Fortress Biotech on September 17, 2024 and sell it today you would lose (7.00) from holding Fortress Biotech or give up 3.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fortress Biotech  vs.  Bio Path Holdings

 Performance 
       Timeline  
Fortress Biotech 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Biotech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Fortress Biotech is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Bio Path Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bio Path Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Fortress Biotech and Bio Path Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortress Biotech and Bio Path

The main advantage of trading using opposite Fortress Biotech and Bio Path positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, Bio Path 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 Bio Path will offset losses from the drop in Bio Path's long position.
The idea behind Fortress Biotech and Bio Path 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Bonds Directory
Find actively traded corporate debentures issued by US companies
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Commodity Directory
Find actively traded commodities issued by global exchanges
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon