Correlation Between Bio Techne and Biomm SA

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

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

Diversification Opportunities for Bio Techne and Biomm SA

-0.04

Correlation Coefficient

Bio Techne  Biomm SA

Good diversification

The 3 months correlation between Bio and Biomm is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne and Biomm SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomm SA and Bio Techne 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 Bio Techne are associated (or correlated) with Biomm SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomm SA has no effect on the direction of Bio Techne i.e., Bio Techne and Biomm SA go up and down completely randomly.

Pair Corralation between Bio Techne and Biomm SA

Assuming the 90 days trading horizon Bio Techne is expected to generate 1.39 times more return on investment than Biomm SA. However, Bio Techne is 1.39 times more volatile than Biomm SA. It trades about 0.03 of its potential returns per unit of risk. Biomm SA is currently generating about 0.03 per unit of risk. If you would invest  1,497  in Bio Techne on September 24, 2024 and sell it today you would earn a total of  47.00  from holding Bio Techne or generate 3.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.46%
Values	Daily Returns

Bio Techne  vs.  Biomm SA

Bio Techne

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bio Techne sustained solid returns over the last few months and may actually be approaching a breakup point.

Biomm SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomm SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bio Techne and Biomm SA

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

The idea behind Bio Techne and Biomm SA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.