Correlation Between BioInvent International and BioArctic
Can any of the company-specific risk be diversified away by investing in both BioInvent International and BioArctic 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 BioArctic 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 BioArctic AB, you can compare the effects of market volatilities on BioInvent International and BioArctic 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 BioArctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and BioArctic.
Diversification Opportunities for BioInvent International and BioArctic
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BioInvent and BioArctic is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic 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 BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of BioInvent International i.e., BioInvent International and BioArctic go up and down completely randomly.
Pair Corralation between BioInvent International and BioArctic
Assuming the 90 days trading horizon BioInvent International is expected to generate 2.58 times less return on investment than BioArctic. But when comparing it to its historical volatility, BioInvent International AB is 1.12 times less risky than BioArctic. It trades about 0.05 of its potential returns per unit of risk. BioArctic AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 22,460 in BioArctic AB on November 30, 2024 and sell it today you would earn a total of 2,000 from holding BioArctic AB or generate 8.9% 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. BioArctic AB
Performance |
| Timeline |
| BioInvent International |
| BioArctic AB |
BioInvent International and BioArctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and BioArctic
The main advantage of trading using opposite BioInvent International and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, BioArctic 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 BioArctic will offset losses from the drop in BioArctic's long position.| BioInvent International vs. Hansa Biopharma 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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