Correlation Between Bavarian Nordic and BioPorto
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and BioPorto 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 Bavarian Nordic and BioPorto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and BioPorto, you can compare the effects of market volatilities on Bavarian Nordic and BioPorto 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 Bavarian Nordic with a short position of BioPorto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and BioPorto.
Diversification Opportunities for Bavarian Nordic and BioPorto
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bavarian and BioPorto is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and BioPorto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPorto and Bavarian Nordic 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 Bavarian Nordic are associated (or correlated) with BioPorto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPorto has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and BioPorto go up and down completely randomly.
Pair Corralation between Bavarian Nordic and BioPorto
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 1.47 times more return on investment than BioPorto. However, Bavarian Nordic is 1.47 times more volatile than BioPorto. It trades about -0.1 of its potential returns per unit of risk. BioPorto is currently generating about -0.27 per unit of risk. If you would invest 22,500 in Bavarian Nordic on August 25, 2024 and sell it today you would lose (2,660) from holding Bavarian Nordic or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. BioPorto
Performance |
| Timeline |
| Bavarian Nordic |
| BioPorto |
Bavarian Nordic and BioPorto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and BioPorto
The main advantage of trading using opposite Bavarian Nordic and BioPorto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, BioPorto 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 BioPorto will offset losses from the drop in BioPorto's long position.| Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. Danske Bank AS | Bavarian Nordic vs. Genmab AS | Bavarian Nordic vs. DSV Panalpina AS |
| BioPorto vs. Ambu AS | BioPorto vs. Bavarian Nordic | BioPorto vs. Zealand Pharma AS | BioPorto vs. Orphazyme AS |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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