Correlation Between Bio Meat and Baran

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

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

Diversification Opportunities for Bio Meat and Baran

-0.86

Correlation Coefficient

Bio Meat  Baran

Pay attention - limited upside

The 3 months correlation between Bio and Baran is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bio Meat Foodtech and Baran Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baran Group and Bio Meat 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 Bio Meat Foodtech are associated (or correlated) with Baran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baran Group has no effect on the direction of Bio Meat i.e., Bio Meat and Baran go up and down completely randomly.

Pair Corralation between Bio Meat and Baran

Assuming the 90 days trading horizon Bio Meat Foodtech is expected to under-perform the Baran. In addition to that, Bio Meat is 1.3 times more volatile than Baran Group. It trades about -0.01 of its total potential returns per unit of risk. Baran Group is currently generating about 0.1 per unit of volatility. If you would invest  100,900  in Baran Group on March 2, 2024 and sell it today you would earn a total of  9,100  from holding Baran Group or generate 9.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	97.92%
Values	Daily Returns

Bio Meat Foodtech  vs.  Baran Group

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bio Meat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baran Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baran Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Baran sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Meat and Baran

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

The idea behind Bio Meat Foodtech and Baran Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.