Correlation Between Bavarian Nordic and Isofol Medical
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Isofol Medical 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 Isofol Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Isofol Medical AB, you can compare the effects of market volatilities on Bavarian Nordic and Isofol Medical 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 Isofol Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Isofol Medical.
Diversification Opportunities for Bavarian Nordic and Isofol Medical
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bavarian and Isofol is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Isofol Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isofol Medical 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 Isofol Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isofol Medical AB has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Isofol Medical go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Isofol Medical
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 0.54 times more return on investment than Isofol Medical. However, Bavarian Nordic is 1.87 times less risky than Isofol Medical. It trades about -0.02 of its potential returns per unit of risk. Isofol Medical AB is currently generating about -0.05 per unit of risk. If you would invest 21,350 in Bavarian Nordic on September 13, 2024 and sell it today you would lose (1,340) from holding Bavarian Nordic or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. Isofol Medical AB
Performance |
| Timeline |
| Bavarian Nordic |
| Isofol Medical AB |
Bavarian Nordic and Isofol Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Isofol Medical
The main advantage of trading using opposite Bavarian Nordic and Isofol Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Isofol Medical 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 Isofol Medical will offset losses from the drop in Isofol Medical's long position.| Bavarian Nordic vs. Dataproces Group AS | Bavarian Nordic vs. cBrain AS | Bavarian Nordic vs. Nilfisk Holding AS | Bavarian Nordic vs. Danish Aerospace |
| Isofol Medical vs. Bavarian Nordic | Isofol Medical vs. BioPorto | Isofol Medical vs. Zaptec AS | Isofol Medical vs. cBrain 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 Stocks Directory module to find actively traded stocks across global markets.
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