Correlation Between BioLineRx and Protalix Biotherapeutics

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

By analyzing existing cross correlation between BioLineRx and Protalix Biotherapeutics, you can compare the effects of market volatilities on BioLineRx and Protalix Biotherapeutics 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 Protalix Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLineRx and Protalix Biotherapeutics.

Diversification Opportunities for BioLineRx and Protalix Biotherapeutics

-0.34

Correlation Coefficient

BioLineRx  Protalix Biotherapeutics

Very good diversification

The 3 months correlation between BioLineRx and Protalix is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BioLineRx and Protalix Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protalix Biotherapeutics 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 Protalix Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protalix Biotherapeutics has no effect on the direction of BioLineRx i.e., BioLineRx and Protalix Biotherapeutics go up and down completely randomly.

Pair Corralation between BioLineRx and Protalix Biotherapeutics

Given the investment horizon of 90 days BioLineRx is expected to generate 2.02 times more return on investment than Protalix Biotherapeutics. However, BioLineRx is 2.02 times more volatile than Protalix Biotherapeutics. It trades about 0.04 of its potential returns per unit of risk. Protalix Biotherapeutics is currently generating about -0.05 per unit of risk. If you would invest  364.00  in BioLineRx on May 20, 2025 and sell it today you would earn a total of  7.00  from holding BioLineRx or generate 1.92% return on investment over 90 days.

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

BioLineRx  vs.  Protalix Biotherapeutics

BioLineRx

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioLineRx are ranked lower than 2 (%) 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.

Protalix Biotherapeutics

Risk-Adjusted Performance

Weakest

Over the last 90 days Protalix Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with BioLineRx and Protalix Biotherapeutics

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

The idea behind BioLineRx and Protalix Biotherapeutics 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.