Correlation Between Bayer Aktiengesellscha and Biogen
Can any of the company-specific risk be diversified away by investing in both Bayer Aktiengesellscha and Biogen 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 Bayer Aktiengesellscha and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer Aktiengesellschaft and Biogen Inc, you can compare the effects of market volatilities on Bayer Aktiengesellscha and Biogen 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 Bayer Aktiengesellscha with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer Aktiengesellscha and Biogen.
Diversification Opportunities for Bayer Aktiengesellscha and Biogen
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bayer and Biogen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bayer Aktiengesellschaft and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and Bayer Aktiengesellscha 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 Bayer Aktiengesellschaft are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Bayer Aktiengesellscha i.e., Bayer Aktiengesellscha and Biogen go up and down completely randomly.
Pair Corralation between Bayer Aktiengesellscha and Biogen
Assuming the 90 days trading horizon Bayer Aktiengesellschaft is expected to under-perform the Biogen. In addition to that, Bayer Aktiengesellscha is 2.61 times more volatile than Biogen Inc. It trades about -0.27 of its total potential returns per unit of risk. Biogen Inc is currently generating about -0.27 per unit of volatility. If you would invest 16,795 in Biogen Inc on August 29, 2024 and sell it today you would lose (1,675) from holding Biogen Inc or give up 9.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bayer Aktiengesellschaft vs. Biogen Inc
Performance |
| Timeline |
| Bayer Aktiengesellschaft |
| Biogen Inc |
Bayer Aktiengesellscha and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer Aktiengesellscha and Biogen
The main advantage of trading using opposite Bayer Aktiengesellscha and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer Aktiengesellscha position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Bayer Aktiengesellscha vs. Benchmark Electronics | Bayer Aktiengesellscha vs. BYD ELECTRONIC | Bayer Aktiengesellscha vs. Alfa Financial Software | Bayer Aktiengesellscha vs. Electronic Arts |
| Biogen vs. CEOTRONICS | Biogen vs. Coor Service Management | Biogen vs. AGF Management Limited | Biogen vs. Jupiter Fund Management |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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