Correlation Between Bavarian Nordic and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and Nanoform Finland 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 Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and Nanoform Finland Plc, you can compare the effects of market volatilities on Bavarian Nordic and Nanoform Finland 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 Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Nanoform Finland.
Diversification Opportunities for Bavarian Nordic and Nanoform Finland
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bavarian and Nanoform is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc 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 Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Nanoform Finland go up and down completely randomly.
Pair Corralation between Bavarian Nordic and Nanoform Finland
Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the Nanoform Finland. But the stock apears to be less risky and, when comparing its historical volatility, Bavarian Nordic is 1.28 times less risky than Nanoform Finland. The stock trades about -0.01 of its potential returns per unit of risk. The Nanoform Finland Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,304 in Nanoform Finland Plc on September 13, 2024 and sell it today you would earn a total of 148.00 from holding Nanoform Finland Plc or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bavarian Nordic vs. Nanoform Finland Plc
Performance |
| Timeline |
| Bavarian Nordic |
| Nanoform Finland Plc |
Bavarian Nordic and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and Nanoform Finland
The main advantage of trading using opposite Bavarian Nordic and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland'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 |
| Nanoform Finland vs. Bavarian Nordic | Nanoform Finland vs. BioPorto | Nanoform Finland vs. Zaptec AS | Nanoform Finland 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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