Correlation Between Biophytis and Poxel SA
Can any of the company-specific risk be diversified away by investing in both Biophytis and Poxel SA 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 Biophytis and Poxel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biophytis SA and Poxel SA, you can compare the effects of market volatilities on Biophytis and Poxel SA 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 Biophytis with a short position of Poxel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biophytis and Poxel SA.
Diversification Opportunities for Biophytis and Poxel SA
Almost no diversification
The 3 months correlation between Biophytis and Poxel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA and Biophytis 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 Biophytis SA are associated (or correlated) with Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of Biophytis i.e., Biophytis and Poxel SA go up and down completely randomly.
Pair Corralation between Biophytis and Poxel SA
Assuming the 90 days trading horizon Biophytis SA is expected to generate 1.46 times more return on investment than Poxel SA. However, Biophytis is 1.46 times more volatile than Poxel SA. It trades about -0.01 of its potential returns per unit of risk. Poxel SA is currently generating about -0.55 per unit of risk. If you would invest 31.00 in Biophytis SA on September 2, 2024 and sell it today you would lose (1.00) from holding Biophytis SA or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biophytis SA vs. Poxel SA
Performance |
| Timeline |
| Biophytis SA |
| Poxel SA |
Biophytis and Poxel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biophytis and Poxel SA
The main advantage of trading using opposite Biophytis and Poxel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biophytis position performs unexpectedly, Poxel SA 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 Poxel SA will offset losses from the drop in Poxel SA's long position.The idea behind Biophytis SA and Poxel SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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