Correlation Between Bavarian Nordic and XSpray Pharma
Can any of the company-specific risk be diversified away by investing in both Bavarian Nordic and XSpray Pharma 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 XSpray Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bavarian Nordic and XSpray Pharma AB, you can compare the effects of market volatilities on Bavarian Nordic and XSpray Pharma 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 XSpray Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and XSpray Pharma.
Diversification Opportunities for Bavarian Nordic and XSpray Pharma
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bavarian and XSpray is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and XSpray Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XSpray Pharma 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 XSpray Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XSpray Pharma AB has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and XSpray Pharma go up and down completely randomly.
Pair Corralation between Bavarian Nordic and XSpray Pharma
Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 1.13 times less return on investment than XSpray Pharma. But when comparing it to its historical volatility, Bavarian Nordic is 1.29 times less risky than XSpray Pharma. It trades about 0.01 of its potential returns per unit of risk. XSpray Pharma AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,530 in XSpray Pharma AB on September 12, 2024 and sell it today you would lose (1,000.00) from holding XSpray Pharma AB or give up 18.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bavarian Nordic vs. XSpray Pharma AB
Performance |
| Timeline |
| Bavarian Nordic |
| XSpray Pharma AB |
Bavarian Nordic and XSpray Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bavarian Nordic and XSpray Pharma
The main advantage of trading using opposite Bavarian Nordic and XSpray Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bavarian Nordic position performs unexpectedly, XSpray Pharma 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 XSpray Pharma will offset losses from the drop in XSpray Pharma'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 |
| XSpray Pharma vs. Bavarian Nordic | XSpray Pharma vs. BioPorto | XSpray Pharma vs. Zaptec AS | XSpray Pharma 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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