Correlation Between BB Biotech and Alpine Select
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Alpine Select 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 BB Biotech and Alpine Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Biotech AG and Alpine Select AG, you can compare the effects of market volatilities on BB Biotech and Alpine Select 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 BB Biotech with a short position of Alpine Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Alpine Select.
Diversification Opportunities for BB Biotech and Alpine Select
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BION and Alpine is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Alpine Select AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Select AG and BB Biotech 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 BB Biotech AG are associated (or correlated) with Alpine Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Select AG has no effect on the direction of BB Biotech i.e., BB Biotech and Alpine Select go up and down completely randomly.
Pair Corralation between BB Biotech and Alpine Select
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 0.93 times more return on investment than Alpine Select. However, BB Biotech AG is 1.08 times less risky than Alpine Select. It trades about 0.08 of its potential returns per unit of risk. Alpine Select AG is currently generating about 0.03 per unit of risk. If you would invest 3,640 in BB Biotech AG on August 29, 2024 and sell it today you would earn a total of 90.00 from holding BB Biotech AG or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
BB Biotech AG vs. Alpine Select AG
Performance |
| Timeline |
| BB Biotech AG |
| Alpine Select AG |
BB Biotech and Alpine Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Alpine Select
The main advantage of trading using opposite BB Biotech and Alpine Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Alpine Select 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 Alpine Select will offset losses from the drop in Alpine Select's long position.| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
| Alpine Select vs. Santhera Pharmaceuticals Holding | Alpine Select vs. Newron Pharmaceuticals SpA | Alpine Select vs. Basilea Pharmaceutica AG | Alpine Select vs. Evolva Holding SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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