Correlation Between Bavarian Nordic and Cantargia
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Cantargia 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 Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Cantargia AB, you can compare the effects of market volatilities on Bavarian Nordic and Cantargia 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 Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Cantargia.
Diversification Opportunities for Bavarian Nordic and Cantargia
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bavarian and Cantargia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB 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 Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Cantargia go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Cantargia
Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the Cantargia. In addition to that, Bavarian Nordic is 1.22 times more volatile than Cantargia AB. It trades about -0.18 of its total potential returns per unit of risk. Cantargia AB is currently generating about 0.09 per unit of volatility. If you would invest 168.00 in Cantargia AB on November 8, 2024 and sell it today you would earn a total of 7.00 from holding Cantargia AB or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bavarian Nordic vs. Cantargia AB
Performance |
| Timeline |
| Bavarian Nordic |
| Cantargia AB |
Bavarian Nordic and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Cantargia
The main advantage of trading using opposite Bavarian Nordic and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Cantargia 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 Cantargia will offset losses from the drop in Cantargia'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 |
| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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