Correlation Between Biome Technologies and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Biome Technologies and Alstria Office 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 Biome Technologies and Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biome Technologies Plc and alstria office REIT AG, you can compare the effects of market volatilities on Biome Technologies and Alstria Office 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 Biome Technologies with a short position of Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biome Technologies and Alstria Office.
Diversification Opportunities for Biome Technologies and Alstria Office
-0.97 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biome and Alstria is -0.97. Overlapping area represents the amount of risk that can be diversified away by holding Biome Technologies Plc and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT and Biome Technologies 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 Biome Technologies Plc are associated (or correlated) with Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Biome Technologies i.e., Biome Technologies and Alstria Office go up and down completely randomly.
Pair Corralation between Biome Technologies and Alstria Office
Assuming the 90 days trading horizon Biome Technologies Plc is expected to under-perform the Alstria Office. In addition to that, Biome Technologies is 1.53 times more volatile than alstria office REIT AG. It trades about -0.08 of its total potential returns per unit of risk. alstria office REIT AG is currently generating about 0.04 per unit of volatility. If you would invest 529.00 in alstria office REIT AG on September 24, 2024 and sell it today you would earn a total of 232.00 from holding alstria office REIT AG or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biome Technologies Plc vs. alstria office REIT AG
Performance |
| Timeline |
| Biome Technologies Plc |
| alstria office REIT |
Biome Technologies and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biome Technologies and Alstria Office
The main advantage of trading using opposite Biome Technologies and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biome Technologies position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| Biome Technologies vs. Givaudan SA | Biome Technologies vs. Antofagasta PLC | Biome Technologies vs. Ferrexpo PLC | Biome Technologies vs. Atalaya Mining |
| Alstria Office vs. Optima Health plc | Alstria Office vs. HCA Healthcare | Alstria Office vs. Cardinal Health | Alstria Office vs. Fevertree Drinks Plc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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