Correlation Between BioLight Life and International Business
Can any of the company-specific risk be diversified away by investing in both BioLight Life and International Business 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 BioLight Life and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioLight Life Sciences and International Business Machines, you can compare the effects of market volatilities on BioLight Life and International Business 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 BioLight Life with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLight Life and International Business.
Diversification Opportunities for BioLight Life and International Business
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BioLight and International is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BioLight Life Sciences and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and BioLight Life 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 BioLight Life Sciences are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of BioLight Life i.e., BioLight Life and International Business go up and down completely randomly.
Pair Corralation between BioLight Life and International Business
Assuming the 90 days trading horizon BioLight Life Sciences is expected to under-perform the International Business. In addition to that, BioLight Life is 2.56 times more volatile than International Business Machines. It trades about -0.06 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.07 per unit of volatility. If you would invest 12,356 in International Business Machines on January 18, 2024 and sell it today you would earn a total of 5,954 from holding International Business Machines or generate 48.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.99% |
| Values | Daily Returns |
BioLight Life Sciences vs. International Business Machine
Performance |
| Timeline |
| BioLight Life Sciences |
| International Business |
BioLight Life and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioLight Life and International Business
The main advantage of trading using opposite BioLight Life and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioLight Life position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| BioLight Life vs. Nextcom | BioLight Life vs. Palram | BioLight Life vs. Sofwave Medical | BioLight Life vs. Automatic Bank Services |
| International Business vs. Globant SA | International Business vs. Concentrix | International Business vs. CDW Corp | International Business vs. BigBearai Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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