Correlation Between Active Biotech and Saniona AB
Can any of the company-specific risk be diversified away by investing in both Active Biotech and Saniona AB 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 Active Biotech and Saniona AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Active Biotech AB and Saniona AB, you can compare the effects of market volatilities on Active Biotech and Saniona AB 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 Active Biotech with a short position of Saniona AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Biotech and Saniona AB.
Diversification Opportunities for Active Biotech and Saniona AB
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Active and Saniona is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Active Biotech AB and Saniona AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saniona AB and Active Biotech 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 Active Biotech AB are associated (or correlated) with Saniona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saniona AB has no effect on the direction of Active Biotech i.e., Active Biotech and Saniona AB go up and down completely randomly.
Pair Corralation between Active Biotech and Saniona AB
Assuming the 90 days trading horizon Active Biotech is expected to generate 1.5 times less return on investment than Saniona AB. But when comparing it to its historical volatility, Active Biotech AB is 1.1 times less risky than Saniona AB. It trades about 0.15 of its potential returns per unit of risk. Saniona AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 397.00 in Saniona AB on September 1, 2024 and sell it today you would earn a total of 318.00 from holding Saniona AB or generate 80.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Active Biotech AB vs. Saniona AB
Performance |
| Timeline |
| Active Biotech AB |
| Saniona AB |
Active Biotech and Saniona AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Biotech and Saniona AB
The main advantage of trading using opposite Active Biotech and Saniona AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Biotech position performs unexpectedly, Saniona AB 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 Saniona AB will offset losses from the drop in Saniona AB's long position.| Active Biotech vs. Cantargia AB | Active Biotech vs. BioArctic AB | Active Biotech vs. Oncopeptides AB | Active Biotech vs. Hansa Biopharma AB |
| Saniona AB vs. Cantargia AB | Saniona AB vs. BioArctic AB | Saniona AB vs. Oncopeptides AB | Saniona AB vs. Hansa Biopharma 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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