Correlation Between BB Biotech and Major Drilling
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By analyzing existing cross correlation between BB Biotech AG and Major Drilling Group, you can compare the effects of market volatilities on BB Biotech and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Major Drilling.
Diversification Opportunities for BB Biotech and Major Drilling
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBZA and Major is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of BB Biotech i.e., BB Biotech and Major Drilling go up and down completely randomly.
Pair Corralation between BB Biotech and Major Drilling
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Major Drilling. But the stock apears to be less risky and, when comparing its historical volatility, BB Biotech AG is 1.37 times less risky than Major Drilling. The stock trades about -0.15 of its potential returns per unit of risk. The Major Drilling Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Major Drilling Group on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Major Drilling Group or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. Major Drilling Group
Performance |
| Timeline |
| BB Biotech AG |
| Major Drilling Group |
BB Biotech and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Major Drilling
The main advantage of trading using opposite BB Biotech and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| BB Biotech vs. PKSHA TECHNOLOGY INC | BB Biotech vs. Schweizer Electronic AG | BB Biotech vs. STMicroelectronics NV | BB Biotech vs. ACCSYS TECHPLC EO |
| Major Drilling vs. BHP Group Limited | Major Drilling vs. Vale SA | Major Drilling vs. Superior Plus Corp | Major Drilling vs. SIVERS SEMICONDUCTORS AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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