Correlation Between Biofrontera and Cyclo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biofrontera and Cyclo Therapeutics 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 Cyclo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofrontera and Cyclo Therapeutics, you can compare the effects of market volatilities on Biofrontera and Cyclo Therapeutics 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 Cyclo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera and Cyclo Therapeutics.
Diversification Opportunities for Biofrontera and Cyclo Therapeutics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biofrontera and Cyclo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera and Cyclo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclo Therapeutics 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 Cyclo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclo Therapeutics has no effect on the direction of Biofrontera i.e., Biofrontera and Cyclo Therapeutics go up and down completely randomly.
Pair Corralation between Biofrontera and Cyclo Therapeutics
Given the investment horizon of 90 days Biofrontera is expected to under-perform the Cyclo Therapeutics. In addition to that, Biofrontera is 1.19 times more volatile than Cyclo Therapeutics. It trades about -0.03 of its total potential returns per unit of risk. Cyclo Therapeutics is currently generating about 0.02 per unit of volatility. If you would invest 95.00 in Cyclo Therapeutics on January 16, 2025 and sell it today you would lose (23.00) from holding Cyclo Therapeutics or give up 24.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Biofrontera vs. Cyclo Therapeutics
Performance |
| Timeline |
| Biofrontera |
| Cyclo Therapeutics |
Risk-Adjusted Performance
Weak
Weak | Strong |
Biofrontera and Cyclo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofrontera and Cyclo Therapeutics
The main advantage of trading using opposite Biofrontera and Cyclo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera position performs unexpectedly, Cyclo Therapeutics 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 Cyclo Therapeutics will offset losses from the drop in Cyclo Therapeutics' long position.| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
| Cyclo Therapeutics vs. Lifecore Biomedical | Cyclo Therapeutics vs. Alpha Teknova | Cyclo Therapeutics vs. Petros Pharmaceuticals | Cyclo Therapeutics vs. Phibro Animal Health |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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