Correlation Between BB Biotech and Superior Plus
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Superior Plus 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 BB Biotech and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Biotech AG and Superior Plus Corp, you can compare the effects of market volatilities on BB Biotech and Superior Plus 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 BB Biotech with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Superior Plus.
Diversification Opportunities for BB Biotech and Superior Plus
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between BBZA and Superior is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and BB Biotech 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 BB Biotech AG are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of BB Biotech i.e., BB Biotech and Superior Plus go up and down completely randomly.
Pair Corralation between BB Biotech and Superior Plus
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 0.35 times more return on investment than Superior Plus. However, BB Biotech AG is 2.88 times less risky than Superior Plus. It trades about 0.12 of its potential returns per unit of risk. Superior Plus Corp is currently generating about 0.02 per unit of risk. If you would invest 3,870 in BB Biotech AG on September 3, 2024 and sell it today you would earn a total of 165.00 from holding BB Biotech AG or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. Superior Plus Corp
Performance |
| Timeline |
| BB Biotech AG |
| Superior Plus Corp |
BB Biotech and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Superior Plus
The main advantage of trading using opposite BB Biotech and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| BB Biotech vs. Tri Pointe Homes | BB Biotech vs. Spirent Communications plc | BB Biotech vs. Mobilezone Holding AG | BB Biotech vs. COMBA TELECOM SYST |
| Superior Plus vs. Collins Foods Limited | Superior Plus vs. Thai Beverage Public | Superior Plus vs. ADRIATIC METALS LS 013355 | Superior Plus vs. Lifeway Foods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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