Correlation Between Biogen and Otsuka Holdings
Can any of the company-specific risk be diversified away by investing in both Biogen and Otsuka Holdings 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 Biogen and Otsuka Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Otsuka Holdings Co, you can compare the effects of market volatilities on Biogen and Otsuka Holdings 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 Biogen with a short position of Otsuka Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Otsuka Holdings.
Diversification Opportunities for Biogen and Otsuka Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biogen and Otsuka is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Otsuka Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka Holdings and Biogen 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 Biogen Inc are associated (or correlated) with Otsuka Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka Holdings has no effect on the direction of Biogen i.e., Biogen and Otsuka Holdings go up and down completely randomly.
Pair Corralation between Biogen and Otsuka Holdings
If you would invest 3,948 in Otsuka Holdings Co on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Otsuka Holdings Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Biogen Inc vs. Otsuka Holdings Co
Performance |
| Timeline |
| Biogen Inc |
| Otsuka Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Biogen and Otsuka Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Otsuka Holdings
The main advantage of trading using opposite Biogen and Otsuka Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Otsuka Holdings 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 Otsuka Holdings will offset losses from the drop in Otsuka Holdings' long position.| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
| Otsuka Holdings vs. Astellas Pharma | Otsuka Holdings vs. Sanofi ADR | Otsuka Holdings vs. Novartis AG ADR | Otsuka Holdings vs. Biogen Inc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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