Correlation Between Primary Health and Bioventix

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

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

Diversification Opportunities for Primary Health and Bioventix

-0.14

Correlation Coefficient

Primary Health  Bioventix

Good diversification

The 3 months correlation between Primary and Bioventix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and Bioventix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventix and Primary Health 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 Primary Health Properties are associated (or correlated) with Bioventix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventix has no effect on the direction of Primary Health i.e., Primary Health and Bioventix go up and down completely randomly.

Pair Corralation between Primary Health and Bioventix

Assuming the 90 days trading horizon Primary Health Properties is expected to under-perform the Bioventix. But the stock apears to be less risky and, when comparing its historical volatility, Primary Health Properties is 2.4 times less risky than Bioventix. The stock trades about -0.06 of its potential returns per unit of risk. The Bioventix is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  250,000  in Bioventix on April 20, 2025 and sell it today you would earn a total of  22,500  from holding Bioventix or generate 9.0% return on investment over 90 days.

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

Primary Health Properties  vs.  Bioventix

Primary Health Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primary Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Primary Health is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bioventix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bioventix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bioventix may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Primary Health and Bioventix

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

The idea behind Primary Health Properties and Bioventix 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.