Correlation Between Biogen and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Biogen and MAHLE Metal 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 MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and MAHLE Metal Leve, you can compare the effects of market volatilities on Biogen and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and MAHLE Metal.
Diversification Opportunities for Biogen and MAHLE Metal
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Biogen and MAHLE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Biogen i.e., Biogen and MAHLE Metal go up and down completely randomly.
Pair Corralation between Biogen and MAHLE Metal
Assuming the 90 days trading horizon Biogen Inc is expected to under-perform the MAHLE Metal. But the stock apears to be less risky and, when comparing its historical volatility, Biogen Inc is 1.11 times less risky than MAHLE Metal. The stock trades about -0.34 of its potential returns per unit of risk. The MAHLE Metal Leve is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,618 in MAHLE Metal Leve on November 4, 2024 and sell it today you would earn a total of 217.00 from holding MAHLE Metal Leve or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biogen Inc vs. MAHLE Metal Leve
Performance |
| Timeline |
| Biogen Inc |
| MAHLE Metal Leve |
Biogen and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and MAHLE Metal
The main advantage of trading using opposite Biogen and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| Biogen vs. MAHLE Metal Leve | Biogen vs. Pentair plc | Biogen vs. Westinghouse Air Brake | Biogen vs. Multilaser Industrial SA |
| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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