Correlation Between Alligator Bioscience and Ascelia Pharma
Can any of the company-specific risk be diversified away by investing in both Alligator Bioscience and Ascelia Pharma 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 Alligator Bioscience and Ascelia Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alligator Bioscience AB and Ascelia Pharma AB, you can compare the effects of market volatilities on Alligator Bioscience and Ascelia Pharma 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 Alligator Bioscience with a short position of Ascelia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alligator Bioscience and Ascelia Pharma.
Diversification Opportunities for Alligator Bioscience and Ascelia Pharma
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alligator and Ascelia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alligator Bioscience AB and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and Alligator Bioscience 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 Alligator Bioscience AB are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Alligator Bioscience i.e., Alligator Bioscience and Ascelia Pharma go up and down completely randomly.
Pair Corralation between Alligator Bioscience and Ascelia Pharma
Assuming the 90 days trading horizon Alligator Bioscience AB is expected to generate 15.4 times more return on investment than Ascelia Pharma. However, Alligator Bioscience is 15.4 times more volatile than Ascelia Pharma AB. It trades about 0.13 of its potential returns per unit of risk. Ascelia Pharma AB is currently generating about 0.01 per unit of risk. If you would invest 25.00 in Alligator Bioscience AB on October 30, 2024 and sell it today you would lose (19.40) from holding Alligator Bioscience AB or give up 77.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Alligator Bioscience AB vs. Ascelia Pharma AB
Performance |
| Timeline |
| Alligator Bioscience |
| Ascelia Pharma AB |
Alligator Bioscience and Ascelia Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alligator Bioscience and Ascelia Pharma
The main advantage of trading using opposite Alligator Bioscience and Ascelia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alligator Bioscience position performs unexpectedly, Ascelia Pharma 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 Ascelia Pharma will offset losses from the drop in Ascelia Pharma's long position.| Alligator Bioscience vs. Vitrolife AB | Alligator Bioscience vs. Biotage AB | Alligator Bioscience vs. Sectra AB | Alligator Bioscience vs. BioGaia AB |
| Ascelia Pharma vs. Hansa Biopharma AB | Ascelia Pharma vs. Cantargia AB | Ascelia Pharma vs. Saniona AB | Ascelia Pharma vs. BioArctic 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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