Correlation Between BriaCell Therapeutics and DOW

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

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

Diversification Opportunities for BriaCell Therapeutics and DOW

-0.06
  Correlation Coefficient
BriaCell Therapeutics
DOW

Good diversification

The 3 months correlation between BriaCell and DOW is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BriaCell Therapeutics Corp and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and BriaCell Therapeutics 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 BriaCell Therapeutics Corp are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of BriaCell Therapeutics i.e., BriaCell Therapeutics and DOW go up and down completely randomly.
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Pair Corralation between BriaCell Therapeutics and DOW

Given the investment horizon of 90 days BriaCell Therapeutics Corp is expected to under-perform the DOW. In addition to that, BriaCell Therapeutics is 5.32 times more volatile than DOW. It trades about 0.0 of its total potential returns per unit of risk. DOW is currently generating about 0.11 per unit of volatility. If you would invest  3,536,544  in DOW on October 18, 2021 and sell it today you would earn a total of  54,637  from holding DOW or generate 1.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BriaCell Therapeutics Corp  vs.  DOW

 Performance (%) 
      Timeline 

BriaCell Therapeutics and DOW Volatility Contrast

 Predicted Return Density 
      Returns 

BriaCell Therapeutics Corp

Pair trading matchups for BriaCell Therapeutics

DOW

Pair trading matchups for DOW

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.

Pair Trading with BriaCell Therapeutics and DOW

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

BriaCell Therapeutics Corp

Pair trading matchups for BriaCell Therapeutics

The idea behind BriaCell Therapeutics Corp and DOW 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.

DOW

Pair trading matchups for DOW

Dodge Cox vs. DOW
Hive vs. DOW
TIAA Real vs. DOW
Coca Cola vs. DOW
Ontology vs. DOW
Anchor Protocol vs. DOW
Kava vs. DOW
OMG Network vs. DOW
Vipshop Holdings vs. DOW
Harmony vs. DOW
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.
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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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