Correlation Between Flow Traders and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Emergent Biosolutions 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 Flow Traders and Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Emergent Biosolutions, you can compare the effects of market volatilities on Flow Traders and Emergent Biosolutions 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 Flow Traders with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Emergent Biosolutions.
Diversification Opportunities for Flow Traders and Emergent Biosolutions
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flow and Emergent is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Flow Traders 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 Flow Traders NV are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Flow Traders i.e., Flow Traders and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Flow Traders and Emergent Biosolutions
Assuming the 90 days trading horizon Flow Traders is expected to generate 11.19 times less return on investment than Emergent Biosolutions. But when comparing it to its historical volatility, Flow Traders NV is 4.19 times less risky than Emergent Biosolutions. It trades about 0.04 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Emergent Biosolutions on September 2, 2024 and sell it today you would earn a total of 425.00 from holding Emergent Biosolutions or generate 73.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Flow Traders NV vs. Emergent Biosolutions
Performance |
| Timeline |
| Flow Traders NV |
| Emergent Biosolutions |
Flow Traders and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Emergent Biosolutions
The main advantage of trading using opposite Flow Traders and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Flow Traders vs. Uniper SE | Flow Traders vs. Mulberry Group PLC | Flow Traders vs. London Security Plc | Flow Traders vs. Triad Group PLC |
| Emergent Biosolutions vs. Uniper SE | Emergent Biosolutions vs. Mulberry Group PLC | Emergent Biosolutions vs. London Security Plc | Emergent Biosolutions vs. Triad Group PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |