Correlation Between ATS P and BioRem

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

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

Diversification Opportunities for ATS P and BioRem

-0.69

Correlation Coefficient

ATS P  BioRem

Excellent diversification

The 3 months correlation between ATS and BioRem is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ATS P and BioRem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioRem Inc and ATS P 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 ATS P are associated (or correlated) with BioRem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioRem Inc has no effect on the direction of ATS P i.e., ATS P and BioRem go up and down completely randomly.

Pair Corralation between ATS P and BioRem

Assuming the 90 days trading horizon ATS P is expected to under-perform the BioRem. But the stock apears to be less risky and, when comparing its historical volatility, ATS P is 2.33 times less risky than BioRem. The stock trades about -0.07 of its potential returns per unit of risk. The BioRem Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  100.00  in BioRem Inc on March 11, 2024 and sell it today you would earn a total of  98.00  from holding BioRem Inc or generate 98.0% return on investment over 90 days.

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

ATS P  vs.  BioRem Inc

ATS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATS P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

BioRem Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioRem Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, BioRem showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATS P and BioRem

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

The idea behind ATS P and BioRem 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.