Correlation Between Biofrontera Warrants and Omega Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biofrontera Warrants and Omega 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 Warrants and Omega Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofrontera Warrants and Omega Therapeutics, you can compare the effects of market volatilities on Biofrontera Warrants and Omega 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 Warrants with a short position of Omega Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofrontera Warrants and Omega Therapeutics.
Diversification Opportunities for Biofrontera Warrants and Omega Therapeutics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biofrontera and Omega is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera Warrants and Omega Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Therapeutics and Biofrontera Warrants 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 Warrants are associated (or correlated) with Omega Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Therapeutics has no effect on the direction of Biofrontera Warrants i.e., Biofrontera Warrants and Omega Therapeutics go up and down completely randomly.
Pair Corralation between Biofrontera Warrants and Omega Therapeutics
Assuming the 90 days horizon Biofrontera Warrants is expected to generate 5.24 times more return on investment than Omega Therapeutics. However, Biofrontera Warrants is 5.24 times more volatile than Omega Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Omega Therapeutics is currently generating about -0.3 per unit of risk. If you would invest 19.00 in Biofrontera Warrants on August 31, 2024 and sell it today you would lose (11.11) from holding Biofrontera Warrants or give up 58.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Biofrontera Warrants vs. Omega Therapeutics
Performance |
| Timeline |
| Biofrontera Warrants |
| Omega Therapeutics |
Biofrontera Warrants and Omega Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofrontera Warrants and Omega Therapeutics
The main advantage of trading using opposite Biofrontera Warrants and Omega Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofrontera Warrants position performs unexpectedly, Omega 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 Omega Therapeutics will offset losses from the drop in Omega Therapeutics' long position.| Biofrontera Warrants vs. Bausch Health Companies | Biofrontera Warrants vs. Haleon plc | Biofrontera Warrants vs. Intracellular Th |
| Omega Therapeutics vs. Pmv Pharmaceuticals | Omega Therapeutics vs. Eliem Therapeutics | Omega Therapeutics vs. MediciNova | Omega Therapeutics vs. Pharvaris BV |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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