Correlation Between Novacyt and Biophytis
Can any of the company-specific risk be diversified away by investing in both Novacyt and Biophytis 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 Novacyt and Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novacyt and Biophytis SA, you can compare the effects of market volatilities on Novacyt and Biophytis 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 Novacyt with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novacyt and Biophytis.
Diversification Opportunities for Novacyt and Biophytis
Almost no diversification
The 3 months correlation between Novacyt and Biophytis is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Novacyt and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and Novacyt 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 Novacyt are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of Novacyt i.e., Novacyt and Biophytis go up and down completely randomly.
Pair Corralation between Novacyt and Biophytis
Assuming the 90 days trading horizon Novacyt is expected to under-perform the Biophytis. But the stock apears to be less risky and, when comparing its historical volatility, Novacyt is 1.05 times less risky than Biophytis. The stock trades about -0.15 of its potential returns per unit of risk. The Biophytis SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Biophytis SA on August 28, 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 |
Novacyt vs. Biophytis SA
Performance |
| Timeline |
| Novacyt |
| Biophytis SA |
Novacyt and Biophytis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novacyt and Biophytis
The main advantage of trading using opposite Novacyt and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novacyt position performs unexpectedly, Biophytis 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 Biophytis will offset losses from the drop in Biophytis' long position.| Novacyt vs. Biomerieux SA | Novacyt vs. Eurofins Scientific SE | Novacyt vs. Sartorius Stedim Biotech | Novacyt vs. SEB SA |
| Biophytis vs. Biomerieux SA | Biophytis vs. Eurofins Scientific SE | Biophytis vs. Sartorius Stedim Biotech | Biophytis vs. SEB SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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