Correlation Between Adverum Biotechnologies and BioLineRx

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

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

Diversification Opportunities for Adverum Biotechnologies and BioLineRx

0.49

Correlation Coefficient

Adverum Biotechnologies  BioLineRx

Very weak diversification

The 3 months correlation between Adverum and BioLineRx is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Adverum Biotechnologies and BioLineRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLineRx and Adverum Biotechnologies 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 Adverum Biotechnologies are associated (or correlated) with BioLineRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLineRx has no effect on the direction of Adverum Biotechnologies i.e., Adverum Biotechnologies and BioLineRx go up and down completely randomly.

Pair Corralation between Adverum Biotechnologies and BioLineRx

Given the investment horizon of 90 days Adverum Biotechnologies is expected to generate 0.7 times more return on investment than BioLineRx. However, Adverum Biotechnologies is 1.42 times less risky than BioLineRx. It trades about 0.11 of its potential returns per unit of risk. BioLineRx is currently generating about 0.05 per unit of risk. If you would invest  227.00  in Adverum Biotechnologies on May 21, 2025 and sell it today you would earn a total of  66.00  from holding Adverum Biotechnologies or generate 29.07% return on investment over 90 days.

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

Adverum Biotechnologies  vs.  BioLineRx

Adverum Biotechnologies

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Adverum Biotechnologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Adverum Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

BioLineRx

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in BioLineRx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BioLineRx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adverum Biotechnologies and BioLineRx

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

The idea behind Adverum Biotechnologies and BioLineRx 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.