Correlation Between Beyond Oil and BioAdaptives

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

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

Diversification Opportunities for Beyond Oil and BioAdaptives

-0.26

Correlation Coefficient

Beyond Oil  BioAdaptives

Very good diversification

The 3 months correlation between Beyond and BioAdaptives is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Oil and BioAdaptives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAdaptives and Beyond Oil 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 Beyond Oil are associated (or correlated) with BioAdaptives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAdaptives has no effect on the direction of Beyond Oil i.e., Beyond Oil and BioAdaptives go up and down completely randomly.

Pair Corralation between Beyond Oil and BioAdaptives

Assuming the 90 days horizon Beyond Oil is expected to generate 0.37 times more return on investment than BioAdaptives. However, Beyond Oil is 2.68 times less risky than BioAdaptives. It trades about 0.16 of its potential returns per unit of risk. BioAdaptives is currently generating about 0.04 per unit of risk. If you would invest  170.00  in Beyond Oil on January 29, 2025 and sell it today you would earn a total of  104.00  from holding Beyond Oil or generate 61.18% return on investment over 90 days.

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

Beyond Oil  vs.  BioAdaptives

Beyond Oil

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Oil are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Beyond Oil reported solid returns over the last few months and may actually be approaching a breakup point.

BioAdaptives

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Beyond Oil and BioAdaptives

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

The idea behind Beyond Oil and BioAdaptives 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.