Correlation Between Bioscience Animal and Halcyon Technology

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

By analyzing existing cross correlation between Bioscience Animal Health and Halcyon Technology Public, you can compare the effects of market volatilities on Bioscience Animal and Halcyon Technology 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 Bioscience Animal with a short position of Halcyon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioscience Animal and Halcyon Technology.

Diversification Opportunities for Bioscience Animal and Halcyon Technology

0.64

Correlation Coefficient

Bioscience Animal  Halcyon Technology

Poor diversification

The 3 months correlation between Bioscience and Halcyon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bioscience Animal Health and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public and Bioscience Animal 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 Bioscience Animal Health are associated (or correlated) with Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of Bioscience Animal i.e., Bioscience Animal and Halcyon Technology go up and down completely randomly.

Pair Corralation between Bioscience Animal and Halcyon Technology

Assuming the 90 days trading horizon Bioscience Animal Health is expected to under-perform the Halcyon Technology. In addition to that, Bioscience Animal is 1.2 times more volatile than Halcyon Technology Public. It trades about -0.06 of its total potential returns per unit of risk. Halcyon Technology Public is currently generating about -0.07 per unit of volatility. If you would invest  312.00  in Halcyon Technology Public on April 24, 2025 and sell it today you would lose (28.00) from holding Halcyon Technology Public or give up 8.97% of portfolio value over 90 days.

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

Bioscience Animal Health  vs.  Halcyon Technology Public

Bioscience Animal Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bioscience Animal Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Halcyon Technology Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Halcyon Technology Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers 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 Bioscience Animal and Halcyon Technology

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

The idea behind Bioscience Animal Health and Halcyon Technology Public 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.