Correlation Between Nemaura Medical and Biomerica

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

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

Diversification Opportunities for Nemaura Medical and Biomerica

-0.17

Correlation Coefficient

Nemaura Medical  Biomerica

Good diversification

The 3 months correlation between Nemaura and Biomerica is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nemaura Medical and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica and Nemaura Medical 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 Nemaura Medical are associated (or correlated) with Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Nemaura Medical i.e., Nemaura Medical and Biomerica go up and down completely randomly.

Pair Corralation between Nemaura Medical and Biomerica

If you would invest  93.00  in Nemaura Medical on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Nemaura Medical or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Nemaura Medical  vs.  Biomerica

Nemaura Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nemaura Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nemaura Medical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Biomerica

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Biomerica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nemaura Medical and Biomerica

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

The idea behind Nemaura Medical and Biomerica 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.