Correlation Between Biogen and Ovid Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biogen and Ovid 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 Biogen and Ovid Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Ovid Therapeutics, you can compare the effects of market volatilities on Biogen and Ovid 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 Biogen with a short position of Ovid Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Ovid Therapeutics.
Diversification Opportunities for Biogen and Ovid Therapeutics
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Biogen and Ovid is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Ovid Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ovid Therapeutics 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 Ovid Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ovid Therapeutics has no effect on the direction of Biogen i.e., Biogen and Ovid Therapeutics go up and down completely randomly.
Pair Corralation between Biogen and Ovid Therapeutics
Given the investment horizon of 90 days Biogen Inc is expected to generate 0.46 times more return on investment than Ovid Therapeutics. However, Biogen Inc is 2.19 times less risky than Ovid Therapeutics. It trades about -0.22 of its potential returns per unit of risk. Ovid Therapeutics is currently generating about -0.4 per unit of risk. If you would invest 14,938 in Biogen Inc on October 23, 2024 and sell it today you would lose (883.00) from holding Biogen Inc or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. Ovid Therapeutics
Performance |
| Timeline |
| Biogen Inc |
| Ovid Therapeutics |
Biogen and Ovid Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Ovid Therapeutics
The main advantage of trading using opposite Biogen and Ovid Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Ovid 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 Ovid Therapeutics will offset losses from the drop in Ovid Therapeutics' long position.| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
| Ovid Therapeutics vs. CytomX Therapeutics | Ovid Therapeutics vs. Spero Therapeutics | Ovid Therapeutics vs. Instil Bio | Ovid Therapeutics vs. NextCure |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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