Correlation Between Covalon Technologies and Advanced Biomedical

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

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

Diversification Opportunities for Covalon Technologies and Advanced Biomedical

-0.49

Correlation Coefficient

Covalon Technologies  Advanced Biomedical

Very good diversification

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

Pair Corralation between Covalon Technologies and Advanced Biomedical

Assuming the 90 days horizon Covalon Technologies is expected to generate 0.21 times more return on investment than Advanced Biomedical. However, Covalon Technologies is 4.66 times less risky than Advanced Biomedical. It trades about 0.04 of its potential returns per unit of risk. Advanced Biomedical Technologies is currently generating about -0.04 per unit of risk. If you would invest  172.00  in Covalon Technologies on May 3, 2025 and sell it today you would earn a total of  9.00  from holding Covalon Technologies or generate 5.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Covalon Technologies  vs.  Advanced Biomedical Technologi

Covalon Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Covalon Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Covalon Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Advanced Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Biomedical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Covalon Technologies and Advanced Biomedical

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

The idea behind Covalon Technologies and Advanced Biomedical Technologies 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.