Correlation Between Bavarian Nordic and Kancera AB
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Kancera AB 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 Kancera AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Kancera AB, you can compare the effects of market volatilities on Bavarian Nordic and Kancera AB 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 Kancera AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Kancera AB.
Diversification Opportunities for Bavarian Nordic and Kancera AB
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bavarian and Kancera is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Kancera AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kancera 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 Kancera AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kancera AB has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Kancera AB go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Kancera AB
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 0.35 times more return on investment than Kancera AB. However, Bavarian Nordic is 2.84 times less risky than Kancera AB. It trades about -0.07 of its potential returns per unit of risk. Kancera AB is currently generating about -0.11 per unit of risk. If you would invest 21,930 in Bavarian Nordic on August 26, 2024 and sell it today you would lose (2,090) from holding Bavarian Nordic or give up 9.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. Kancera AB
Performance |
| Timeline |
| Bavarian Nordic |
| Kancera AB |
Bavarian Nordic and Kancera AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Kancera AB
The main advantage of trading using opposite Bavarian Nordic and Kancera AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Kancera AB 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 Kancera AB will offset losses from the drop in Kancera AB'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 |
| Kancera AB vs. Bavarian Nordic | Kancera AB vs. BioPorto | Kancera AB vs. Zaptec AS | Kancera AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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