Correlation Between Bio Techne and Waters

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

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

Diversification Opportunities for Bio Techne and Waters

-0.49

Correlation Coefficient

Bio Techne  Waters

Very good diversification

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

Pair Corralation between Bio Techne and Waters

Given the investment horizon of 90 days Bio Techne Corp is expected to generate 1.04 times more return on investment than Waters. However, Bio Techne is 1.04 times more volatile than Waters. It trades about 0.1 of its potential returns per unit of risk. Waters is currently generating about -0.07 per unit of risk. If you would invest  4,955  in Bio Techne Corp on May 1, 2025 and sell it today you would earn a total of  832.00  from holding Bio Techne Corp or generate 16.79% return on investment over 90 days.

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

Bio Techne Corp  vs.  Waters

Bio Techne Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Bio Techne demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Waters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bio Techne and Waters

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

The idea behind Bio Techne Corp and Waters 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.