Correlation Between Lineage Cell and BioLine RX

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

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

Diversification Opportunities for Lineage Cell and BioLine RX

0.59

Correlation Coefficient

Lineage Cell  BioLine RX

Very weak diversification

The 3 months correlation between Lineage and BioLine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lineage Cell Therapeutics, and BioLine RX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLine RX and Lineage Cell 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 Lineage Cell Therapeutics, are associated (or correlated) with BioLine RX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLine RX has no effect on the direction of Lineage Cell i.e., Lineage Cell and BioLine RX go up and down completely randomly.

Pair Corralation between Lineage Cell and BioLine RX

Assuming the 90 days trading horizon Lineage Cell Therapeutics, is expected to generate 1.15 times more return on investment than BioLine RX. However, Lineage Cell is 1.15 times more volatile than BioLine RX. It trades about 0.2 of its potential returns per unit of risk. BioLine RX is currently generating about 0.06 per unit of risk. If you would invest  16,360  in Lineage Cell Therapeutics, on May 17, 2025 and sell it today you would earn a total of  17,860  from holding Lineage Cell Therapeutics, or generate 109.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.08%
Values	Daily Returns

Lineage Cell Therapeutics,  vs.  BioLine RX

Lineage Cell Therape

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lineage Cell Therapeutics, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lineage Cell sustained solid returns over the last few months and may actually be approaching a breakup point.

BioLine RX

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in BioLine RX are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BioLine RX sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lineage Cell and BioLine RX

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

The idea behind Lineage Cell Therapeutics, and BioLine RX 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.