Correlation Between General Dynamics and Bion Environmental

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

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

Diversification Opportunities for General Dynamics and Bion Environmental

-0.1

Correlation Coefficient

General Dynamics  Bion Environmental

Good diversification

The 3 months correlation between General and Bion is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and Bion Environmental Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bion Environmental and General Dynamics 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 General Dynamics are associated (or correlated) with Bion Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bion Environmental has no effect on the direction of General Dynamics i.e., General Dynamics and Bion Environmental go up and down completely randomly.

Pair Corralation between General Dynamics and Bion Environmental

Allowing for the 90-day total investment horizon General Dynamics is expected to generate 1.3 times less return on investment than Bion Environmental. But when comparing it to its historical volatility, General Dynamics is 10.18 times less risky than Bion Environmental. It trades about 0.22 of its potential returns per unit of risk. Bion Environmental Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Bion Environmental Technologies on July 9, 2025 and sell it today you would lose (3.00) from holding Bion Environmental Technologies or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

General Dynamics  vs.  Bion Environmental Technologie

General Dynamics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in General Dynamics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, General Dynamics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bion Environmental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bion Environmental Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Bion Environmental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with General Dynamics and Bion Environmental

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

The idea behind General Dynamics and Bion Environmental 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.