Correlation Between BioLineRx and Adverum Biotechnologies

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

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

Diversification Opportunities for BioLineRx and Adverum Biotechnologies

0.49

Correlation Coefficient

BioLineRx  Adverum Biotechnologies

Very weak diversification

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

Pair Corralation between BioLineRx and Adverum Biotechnologies

Given the investment horizon of 90 days BioLineRx is expected to generate 1.65 times less return on investment than Adverum Biotechnologies. In addition to that, BioLineRx is 1.41 times more volatile than Adverum Biotechnologies. It trades about 0.05 of its total potential returns per unit of risk. Adverum Biotechnologies is currently generating about 0.11 per unit of volatility. 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	98.39%
Values	Daily Returns

BioLineRx  vs.  Adverum Biotechnologies

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.

Adverum Biotechnologies

Risk-Adjusted Performance

Fair

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.

Pair Trading with BioLineRx and Adverum Biotechnologies

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

The idea behind BioLineRx and Adverum Biotechnologies 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.