Correlation Between BioArctic and BioInvent International
Can any of the company-specific risk be diversified away by investing in both BioArctic and BioInvent International 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 BioArctic and BioInvent International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioArctic AB and BioInvent International AB, you can compare the effects of market volatilities on BioArctic and BioInvent International 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 BioArctic with a short position of BioInvent International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioArctic and BioInvent International.
Diversification Opportunities for BioArctic and BioInvent International
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioArctic and BioInvent is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BioArctic AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International and BioArctic 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 BioArctic AB are associated (or correlated) with BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of BioArctic i.e., BioArctic and BioInvent International go up and down completely randomly.
Pair Corralation between BioArctic and BioInvent International
Assuming the 90 days trading horizon BioArctic AB is expected to under-perform the BioInvent International. In addition to that, BioArctic is 1.12 times more volatile than BioInvent International AB. It trades about -0.01 of its total potential returns per unit of risk. BioInvent International AB is currently generating about 0.05 per unit of volatility. If you would invest 2,720 in BioInvent International AB on August 29, 2024 and sell it today you would earn a total of 1,740 from holding BioInvent International AB or generate 63.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioArctic AB vs. BioInvent International AB
Performance |
| Timeline |
| BioArctic AB |
| BioInvent International |
BioArctic and BioInvent International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioArctic and BioInvent International
The main advantage of trading using opposite BioArctic and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioArctic position performs unexpectedly, BioInvent International 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 BioInvent International will offset losses from the drop in BioInvent International's long position.| BioArctic vs. Oncopeptides AB | BioArctic vs. Camurus AB | BioArctic vs. Hansa Biopharma AB | BioArctic vs. Cantargia AB |
| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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