Correlation Between Biofrontera and CV Sciences
Can any of the company-specific risk be diversified away by investing in both Biofrontera and CV Sciences 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 Biofrontera and CV Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofrontera and CV Sciences, you can compare the effects of market volatilities on Biofrontera and CV Sciences 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 Biofrontera with a short position of CV Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera and CV Sciences.
Diversification Opportunities for Biofrontera and CV Sciences
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Biofrontera and CVSI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera and CV Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CV Sciences and Biofrontera 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 Biofrontera are associated (or correlated) with CV Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CV Sciences has no effect on the direction of Biofrontera i.e., Biofrontera and CV Sciences go up and down completely randomly.
Pair Corralation between Biofrontera and CV Sciences
Given the investment horizon of 90 days Biofrontera is expected to generate 0.98 times more return on investment than CV Sciences. However, Biofrontera is 1.02 times less risky than CV Sciences. It trades about 0.06 of its potential returns per unit of risk. CV Sciences is currently generating about -0.04 per unit of risk. If you would invest 89.00 in Biofrontera on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Biofrontera or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biofrontera vs. CV Sciences
Performance |
| Timeline |
| Biofrontera |
| CV Sciences |
Biofrontera and CV Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofrontera and CV Sciences
The main advantage of trading using opposite Biofrontera and CV Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera position performs unexpectedly, CV Sciences 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 CV Sciences will offset losses from the drop in CV Sciences' long position.| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
| CV Sciences vs. Embotelladora Andina SA | CV Sciences vs. Signet International Holdings | CV Sciences vs. National Beverage Corp | CV Sciences vs. PT Astra International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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