Correlation Between Biomerieux and AB Science
Can any of the company-specific risk be diversified away by investing in both Biomerieux and AB Science 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 Biomerieux and AB Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomerieux SA and AB Science SA, you can compare the effects of market volatilities on Biomerieux and AB Science 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 Biomerieux with a short position of AB Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomerieux and AB Science.
Diversification Opportunities for Biomerieux and AB Science
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biomerieux and AB Science is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Biomerieux SA and AB Science SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Science SA and Biomerieux 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 Biomerieux SA are associated (or correlated) with AB Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Science SA has no effect on the direction of Biomerieux i.e., Biomerieux and AB Science go up and down completely randomly.
Pair Corralation between Biomerieux and AB Science
Assuming the 90 days trading horizon Biomerieux SA is expected to generate 0.46 times more return on investment than AB Science. However, Biomerieux SA is 2.18 times less risky than AB Science. It trades about 0.03 of its potential returns per unit of risk. AB Science SA is currently generating about -0.14 per unit of risk. If you would invest 9,435 in Biomerieux SA on September 3, 2024 and sell it today you would earn a total of 315.00 from holding Biomerieux SA or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomerieux SA vs. AB Science SA
Performance |
| Timeline |
| Biomerieux SA |
| AB Science SA |
Biomerieux and AB Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomerieux and AB Science
The main advantage of trading using opposite Biomerieux and AB Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomerieux position performs unexpectedly, AB Science 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 AB Science will offset losses from the drop in AB Science's long position.| Biomerieux vs. Sartorius Stedim Biotech | Biomerieux vs. Eurofins Scientific SE | Biomerieux vs. Ipsen SA | Biomerieux vs. Edenred SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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