Correlation Between SIVERS SEMICONDUCTORS and BB Biotech
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and BB Biotech 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 SIVERS SEMICONDUCTORS and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and BB Biotech AG, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and BB Biotech 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 SIVERS SEMICONDUCTORS with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and BB Biotech.
Diversification Opportunities for SIVERS SEMICONDUCTORS and BB Biotech
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SIVERS and BBZA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and BB Biotech go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and BB Biotech
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the BB Biotech. In addition to that, SIVERS SEMICONDUCTORS is 6.66 times more volatile than BB Biotech AG. It trades about -0.06 of its total potential returns per unit of risk. BB Biotech AG is currently generating about 0.1 per unit of volatility. If you would invest 3,875 in BB Biotech AG on September 1, 2024 and sell it today you would earn a total of 160.00 from holding BB Biotech AG or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. BB Biotech AG
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| BB Biotech AG |
SIVERS SEMICONDUCTORS and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and BB Biotech
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, BB Biotech 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 BB Biotech will offset losses from the drop in BB Biotech's long position.The idea behind SIVERS SEMICONDUCTORS AB and BB Biotech AG 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.| BB Biotech vs. Superior Plus Corp | BB Biotech vs. NMI Holdings | BB Biotech vs. Origin Agritech | BB Biotech vs. SIVERS SEMICONDUCTORS AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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