Correlation Between BioInvent International and Lipidor Ab
Can any of the company-specific risk be diversified away by investing in both BioInvent International and Lipidor 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 Lipidor 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 Lipidor Ab, you can compare the effects of market volatilities on BioInvent International and Lipidor 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 Lipidor Ab. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Lipidor Ab.
Diversification Opportunities for BioInvent International and Lipidor Ab
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BioInvent and Lipidor is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Lipidor Ab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipidor 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 Lipidor Ab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipidor Ab has no effect on the direction of BioInvent International i.e., BioInvent International and Lipidor Ab go up and down completely randomly.
Pair Corralation between BioInvent International and Lipidor Ab
Assuming the 90 days trading horizon BioInvent International is expected to generate 20.57 times less return on investment than Lipidor Ab. But when comparing it to its historical volatility, BioInvent International AB is 4.16 times less risky than Lipidor Ab. It trades about 0.01 of its potential returns per unit of risk. Lipidor Ab is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Lipidor Ab on October 12, 2024 and sell it today you would lose (36.00) from holding Lipidor Ab or give up 52.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BioInvent International AB vs. Lipidor Ab
Performance |
| Timeline |
| BioInvent International |
| Lipidor Ab |
BioInvent International and Lipidor Ab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and Lipidor Ab
The main advantage of trading using opposite BioInvent International and Lipidor Ab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, Lipidor 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 Lipidor Ab will offset losses from the drop in Lipidor Ab's long position.| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides AB |
| Lipidor Ab vs. BioInvent International AB | Lipidor Ab vs. Hansa Biopharma AB | Lipidor Ab vs. ExpreS2ion Biotech Holding | Lipidor Ab vs. Saniona 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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