Correlation Between Babylon Holdings and Ecosciences

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

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

Diversification Opportunities for Babylon Holdings and Ecosciences

0.0

Correlation Coefficient

Babylon Holdings  Ecosciences

Pay attention - limited upside

The 3 months correlation between Babylon and Ecosciences is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Babylon Holdings Limited and Ecosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecosciences and Babylon Holdings 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 Babylon Holdings Limited are associated (or correlated) with Ecosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecosciences has no effect on the direction of Babylon Holdings i.e., Babylon Holdings and Ecosciences go up and down completely randomly.

Pair Corralation between Babylon Holdings and Ecosciences

If you would invest  0.00  in Ecosciences on May 5, 2025 and sell it today you would earn a total of  0.01  from holding Ecosciences or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Babylon Holdings Limited  vs.  Ecosciences

Babylon Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Babylon Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Babylon Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ecosciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ecosciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Ecosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Babylon Holdings and Ecosciences

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

The idea behind Babylon Holdings Limited and Ecosciences 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.