Correlation Between Neuronetics and Intelligent Bio

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

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

Diversification Opportunities for Neuronetics and Intelligent Bio

-0.41

Correlation Coefficient

Neuronetics  Intelligent Bio

Very good diversification

The 3 months correlation between Neuronetics and Intelligent is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Neuronetics and Intelligent Bio Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Bio Solutions and Neuronetics 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 Neuronetics are associated (or correlated) with Intelligent Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Bio Solutions has no effect on the direction of Neuronetics i.e., Neuronetics and Intelligent Bio go up and down completely randomly.

Pair Corralation between Neuronetics and Intelligent Bio

Given the investment horizon of 90 days Neuronetics is expected to generate 1.47 times more return on investment than Intelligent Bio. However, Neuronetics is 1.47 times more volatile than Intelligent Bio Solutions. It trades about 0.17 of its potential returns per unit of risk. Intelligent Bio Solutions is currently generating about -0.03 per unit of risk. If you would invest  76.00  in Neuronetics on September 29, 2024 and sell it today you would earn a total of  72.00  from holding Neuronetics or generate 94.74% return on investment over 90 days.

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

Neuronetics  vs.  Intelligent Bio Solutions

Neuronetics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neuronetics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Neuronetics displayed solid returns over the last few months and may actually be approaching a breakup point.

Intelligent Bio Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Bio Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers 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 Neuronetics and Intelligent Bio

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

The idea behind Neuronetics and Intelligent Bio Solutions 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..