Correlation Between BioInvent International and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both BioInvent International and Nanoform Finland 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 Nanoform Finland 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 Nanoform Finland Plc, you can compare the effects of market volatilities on BioInvent International and Nanoform Finland 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 Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Nanoform Finland.
Diversification Opportunities for BioInvent International and Nanoform Finland
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BioInvent and Nanoform is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland 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 Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of BioInvent International i.e., BioInvent International and Nanoform Finland go up and down completely randomly.
Pair Corralation between BioInvent International and Nanoform Finland
Assuming the 90 days trading horizon BioInvent International AB is expected to generate 0.95 times more return on investment than Nanoform Finland. However, BioInvent International AB is 1.05 times less risky than Nanoform Finland. It trades about 0.07 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.02 per unit of risk. If you would invest 1,638 in BioInvent International AB on January 25, 2025 and sell it today you would earn a total of 1,312 from holding BioInvent International AB or generate 80.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioInvent International AB vs. Nanoform Finland Plc
Performance |
| Timeline |
| BioInvent International |
| Nanoform Finland Plc |
BioInvent International and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioInvent International and Nanoform Finland
The main advantage of trading using opposite BioInvent International and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland'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 |
| Nanoform Finland vs. Flexion Mobile PLC | Nanoform Finland vs. Catena Media plc | Nanoform Finland vs. AcadeMedia AB | Nanoform Finland vs. Media and Games |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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