Correlation Between Virax Biolabs and Biomx

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

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

Diversification Opportunities for Virax Biolabs and Biomx

0.5

Correlation Coefficient

Virax Biolabs  Biomx

Very weak diversification

The 3 months correlation between Virax and Biomx is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Virax Biolabs Group and Biomx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomx Inc and Virax Biolabs 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 Virax Biolabs Group are associated (or correlated) with Biomx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomx Inc has no effect on the direction of Virax Biolabs i.e., Virax Biolabs and Biomx go up and down completely randomly.

Pair Corralation between Virax Biolabs and Biomx

Given the investment horizon of 90 days Virax Biolabs Group is expected to generate 1.65 times more return on investment than Biomx. However, Virax Biolabs is 1.65 times more volatile than Biomx Inc. It trades about -0.09 of its potential returns per unit of risk. Biomx Inc is currently generating about -0.15 per unit of risk. If you would invest  403.00  in Virax Biolabs Group on September 5, 2024 and sell it today you would lose (217.00) from holding Virax Biolabs Group or give up 53.85% of portfolio value over 90 days.

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

Virax Biolabs Group  vs.  Biomx Inc

Virax Biolabs Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virax Biolabs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Biomx Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Virax Biolabs and Biomx

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

The idea behind Virax Biolabs Group and Biomx Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.