Correlation Between Bio-Techne Corp and M/I Homes

Can any of the company-specific risk be diversified away by investing in both Bio-Techne Corp and M/I Homes 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 Corp and M/I Homes 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 MI Homes, you can compare the effects of market volatilities on Bio-Techne Corp and M/I Homes 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 Corp with a short position of M/I Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio-Techne Corp and M/I Homes.

Diversification Opportunities for Bio-Techne Corp and M/I Homes

0.43

Correlation Coefficient

Bio-Techne Corp  M/I Homes

Very weak diversification

The 3 months correlation between Bio-Techne and M/I is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bio Techne Corp and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes and Bio-Techne Corp 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 M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of Bio-Techne Corp i.e., Bio-Techne Corp and M/I Homes go up and down completely randomly.

Pair Corralation between Bio-Techne Corp and M/I Homes

Assuming the 90 days trading horizon Bio Techne Corp is expected to under-perform the M/I Homes. In addition to that, Bio-Techne Corp is 1.06 times more volatile than MI Homes. It trades about -0.03 of its total potential returns per unit of risk. MI Homes is currently generating about 0.02 per unit of volatility. If you would invest  9,000  in MI Homes on April 20, 2025 and sell it today you would earn a total of  884.00  from holding MI Homes or generate 9.82% return on investment over 90 days.

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

Bio Techne Corp  vs.  MI Homes

Bio Techne Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Techne Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Bio-Techne Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

M/I Homes

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MI Homes are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, M/I Homes may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Bio-Techne Corp and M/I Homes

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

The idea behind Bio Techne Corp and MI Homes 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.