Correlation Between Bavarian Nordic and CBrain AS
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and CBrain AS 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 CBrain AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and cBrain AS, you can compare the effects of market volatilities on Bavarian Nordic and CBrain AS 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 CBrain AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and CBrain AS.
Diversification Opportunities for Bavarian Nordic and CBrain AS
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bavarian and CBrain is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and cBrain AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on cBrain AS 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 CBrain AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of cBrain AS has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and CBrain AS go up and down completely randomly.
Pair Corralation between Bavarian Nordic and CBrain AS
Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the CBrain AS. But the stock apears to be less risky and, when comparing its historical volatility, Bavarian Nordic is 1.31 times less risky than CBrain AS. The stock trades about -0.01 of its potential returns per unit of risk. The cBrain AS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18,520 in cBrain AS on November 4, 2024 and sell it today you would earn a total of 820.00 from holding cBrain AS or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. cBrain AS
Performance |
| Timeline |
| Bavarian Nordic |
| cBrain AS |
Bavarian Nordic and CBrain AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and CBrain AS
The main advantage of trading using opposite Bavarian Nordic and CBrain AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, CBrain AS 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 CBrain AS will offset losses from the drop in CBrain AS'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 |
| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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