Correlation Between Bavarian Nordic and C WorldWide

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Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and C WorldWide 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 C WorldWide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and C WorldWide Globale, you can compare the effects of market volatilities on Bavarian Nordic and C WorldWide 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 C WorldWide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and C WorldWide.

Diversification Opportunities for Bavarian Nordic and C WorldWide

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bavarian and CWIGAKLA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and C WorldWide Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C WorldWide Globale 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 C WorldWide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C WorldWide Globale has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and C WorldWide go up and down completely randomly.

Pair Corralation between Bavarian Nordic and C WorldWide

Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 4.64 times more return on investment than C WorldWide. However, Bavarian Nordic is 4.64 times more volatile than C WorldWide Globale. It trades about 0.02 of its potential returns per unit of risk. C WorldWide Globale is currently generating about 0.06 per unit of risk. If you would invest  18,075  in Bavarian Nordic on September 5, 2024 and sell it today you would earn a total of  525.00  from holding Bavarian Nordic or generate 2.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bavarian Nordic  vs.  C WorldWide Globale

 Performance 
       Timeline  
Bavarian Nordic 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bavarian Nordic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
C WorldWide Globale 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in C WorldWide Globale are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unfluctuating basic indicators, C WorldWide may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bavarian Nordic and C WorldWide Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bavarian Nordic and C WorldWide

The main advantage of trading using opposite Bavarian Nordic and C WorldWide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, C WorldWide 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 C WorldWide will offset losses from the drop in C WorldWide's long position.
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The idea behind Bavarian Nordic and C WorldWide Globale pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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