Correlation Between Akso Health and BIOLASE

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

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

Diversification Opportunities for Akso Health and BIOLASE

-0.18

Correlation Coefficient

Akso Health  BIOLASE

Good diversification

The 3 months correlation between Akso and BIOLASE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Akso Health Group and BIOLASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIOLASE and Akso Health 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 Akso Health Group are associated (or correlated) with BIOLASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIOLASE has no effect on the direction of Akso Health i.e., Akso Health and BIOLASE go up and down completely randomly.

Pair Corralation between Akso Health and BIOLASE

Considering the 90-day investment horizon Akso Health is expected to generate 1.16 times less return on investment than BIOLASE. In addition to that, Akso Health is 1.0 times more volatile than BIOLASE. It trades about 0.06 of its total potential returns per unit of risk. BIOLASE is currently generating about 0.08 per unit of volatility. If you would invest  15.00  in BIOLASE on February 21, 2024 and sell it today you would earn a total of  1.00  from holding BIOLASE or generate 6.67% return on investment over 90 days.

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

Akso Health Group  vs.  BIOLASE

Akso Health Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akso Health Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BIOLASE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BIOLASE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, BIOLASE disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akso Health and BIOLASE

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

The idea behind Akso Health Group and BIOLASE 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.