Correlation Between Bavarian Nordic and HusCompagniet
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and HusCompagniet 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 HusCompagniet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and HusCompagniet AS, you can compare the effects of market volatilities on Bavarian Nordic and HusCompagniet 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 HusCompagniet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and HusCompagniet.
Diversification Opportunities for Bavarian Nordic and HusCompagniet
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bavarian and HusCompagniet is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and HusCompagniet AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HusCompagniet 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 HusCompagniet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HusCompagniet AS has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and HusCompagniet go up and down completely randomly.
Pair Corralation between Bavarian Nordic and HusCompagniet
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 1.69 times more return on investment than HusCompagniet. However, Bavarian Nordic is 1.69 times more volatile than HusCompagniet AS. It trades about 0.05 of its potential returns per unit of risk. HusCompagniet AS is currently generating about 0.06 per unit of risk. If you would invest 15,460 in Bavarian Nordic on August 29, 2024 and sell it today you would earn a total of 3,545 from holding Bavarian Nordic or generate 22.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. HusCompagniet AS
Performance |
| Timeline |
| Bavarian Nordic |
| HusCompagniet AS |
Bavarian Nordic and HusCompagniet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and HusCompagniet
The main advantage of trading using opposite Bavarian Nordic and HusCompagniet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, HusCompagniet 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 HusCompagniet will offset losses from the drop in HusCompagniet'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 |
| HusCompagniet vs. Matas AS | HusCompagniet vs. Netcompany Group AS | HusCompagniet vs. FLSmidth Co | HusCompagniet vs. GN Store Nord |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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