Correlation Between Gain Therapeutics and BioAffinity Technologies

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

By analyzing existing cross correlation between Gain Therapeutics and bioAffinity Technologies Warrant, you can compare the effects of market volatilities on Gain Therapeutics and BioAffinity Technologies 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 Gain Therapeutics with a short position of BioAffinity Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and BioAffinity Technologies.

Diversification Opportunities for Gain Therapeutics and BioAffinity Technologies

-0.45

Correlation Coefficient

Gain Therapeutics  BioAffinity Technologies

Very good diversification

The 3 months correlation between Gain and BioAffinity is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and Gain Therapeutics 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 Gain Therapeutics are associated (or correlated) with BioAffinity Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAffinity Technologies has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and BioAffinity Technologies go up and down completely randomly.

Pair Corralation between Gain Therapeutics and BioAffinity Technologies

Given the investment horizon of 90 days Gain Therapeutics is expected to generate 0.41 times more return on investment than BioAffinity Technologies. However, Gain Therapeutics is 2.43 times less risky than BioAffinity Technologies. It trades about 0.15 of its potential returns per unit of risk. bioAffinity Technologies Warrant is currently generating about 0.04 per unit of risk. If you would invest  104.00  in Gain Therapeutics on August 31, 2024 and sell it today you would earn a total of  70.00  from holding Gain Therapeutics or generate 67.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Gain Therapeutics  vs.  bioAffinity Technologies Warra

Gain Therapeutics

Risk-Adjusted Performance

11 of 100

Good

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

BioAffinity Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in bioAffinity Technologies Warrant are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, BioAffinity Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gain Therapeutics and BioAffinity Technologies

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

The idea behind Gain Therapeutics and bioAffinity Technologies Warrant 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.