Correlation Between BioInvent International and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both BioInvent International and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC, you can compare the effects of market volatilities on BioInvent International and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and AstraZeneca PLC.
Diversification Opportunities for BioInvent International and AstraZeneca PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioInvent and AstraZeneca is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of BioInvent International i.e., BioInvent International and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between BioInvent International and AstraZeneca PLC
Assuming the 90 days trading horizon BioInvent International AB is expected to generate 2.86 times more return on investment than AstraZeneca PLC. However, BioInvent International is 2.86 times more volatile than AstraZeneca PLC. It trades about 0.07 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.06 per unit of risk. If you would invest 3,345 in BioInvent International AB on September 3, 2024 and sell it today you would earn a total of 1,025 from holding BioInvent International AB or generate 30.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioInvent International AB vs. AstraZeneca PLC
Performance |
| Timeline |
| BioInvent International |
| AstraZeneca PLC |
BioInvent International and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and AstraZeneca PLC
The main advantage of trading using opposite BioInvent International and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| BioInvent International vs. Alligator Bioscience AB | BioInvent International vs. Swedish Orphan Biovitrum | BioInvent International vs. Anoto Group AB |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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