Correlation Between BioInvent International and AroCell AB
Can any of the company-specific risk be diversified away by investing in both BioInvent International and AroCell AB 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 BioInvent International and AroCell AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioInvent International AB and AroCell AB, you can compare the effects of market volatilities on BioInvent International and AroCell AB 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 BioInvent International with a short position of AroCell AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and AroCell AB.
Diversification Opportunities for BioInvent International and AroCell AB
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioInvent and AroCell is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and AroCell AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AroCell AB and BioInvent International 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 BioInvent International AB are associated (or correlated) with AroCell AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AroCell AB has no effect on the direction of BioInvent International i.e., BioInvent International and AroCell AB go up and down completely randomly.
Pair Corralation between BioInvent International and AroCell AB
Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the AroCell AB. But the stock apears to be less risky and, when comparing its historical volatility, BioInvent International AB is 3.06 times less risky than AroCell AB. The stock trades about -0.49 of its potential returns per unit of risk. The AroCell AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 43.00 in AroCell AB on September 14, 2024 and sell it today you would lose (2.00) from holding AroCell AB or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioInvent International AB vs. AroCell AB
Performance |
| Timeline |
| BioInvent International |
| AroCell AB |
BioInvent International and AroCell AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and AroCell AB
The main advantage of trading using opposite BioInvent International and AroCell AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, AroCell AB 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 AroCell AB will offset losses from the drop in AroCell AB's long position.| BioInvent International vs. Mendus AB | BioInvent International vs. Cantargia AB | BioInvent International vs. Isofol Medical AB |
| AroCell AB vs. Mendus AB | AroCell AB vs. Cantargia AB | AroCell AB vs. BioInvent International AB | AroCell AB vs. Isofol Medical AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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