Correlation Between 4Imprint Group and Bioventix

Can any of the company-specific risk be diversified away by investing in both 4Imprint Group and Bioventix 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 4Imprint Group and Bioventix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 4Imprint Group Plc and Bioventix, you can compare the effects of market volatilities on 4Imprint Group and Bioventix 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 4Imprint Group with a short position of Bioventix. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Imprint Group and Bioventix.

Diversification Opportunities for 4Imprint Group and Bioventix

-0.08

Correlation Coefficient

4Imprint Group  Bioventix

Good diversification

The 3 months correlation between 4Imprint and Bioventix is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding 4Imprint Group Plc and Bioventix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventix and 4Imprint Group 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 4Imprint Group Plc are associated (or correlated) with Bioventix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventix has no effect on the direction of 4Imprint Group i.e., 4Imprint Group and Bioventix go up and down completely randomly.

Pair Corralation between 4Imprint Group and Bioventix

Assuming the 90 days trading horizon 4Imprint Group Plc is expected to generate 0.94 times more return on investment than Bioventix. However, 4Imprint Group Plc is 1.06 times less risky than Bioventix. It trades about -0.01 of its potential returns per unit of risk. Bioventix is currently generating about -0.05 per unit of risk. If you would invest  525,000  in 4Imprint Group Plc on September 3, 2024 and sell it today you would lose (18,000) from holding 4Imprint Group Plc or give up 3.43% of portfolio value over 90 days.

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

4Imprint Group Plc  vs.  Bioventix

4Imprint Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 4Imprint Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, 4Imprint Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bioventix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioventix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with 4Imprint Group and Bioventix

The main advantage of trading using opposite 4Imprint Group and Bioventix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Imprint Group position performs unexpectedly, Bioventix 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 Bioventix will offset losses from the drop in Bioventix's long position.

The idea behind 4Imprint Group Plc and Bioventix 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.