Correlation Between BB Biotech and Basellandschaftliche
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Basellandschaftliche 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 Basellandschaftliche 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 Basellandschaftliche Kantonalbank, you can compare the effects of market volatilities on BB Biotech and Basellandschaftliche 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 Basellandschaftliche. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Basellandschaftliche.
Diversification Opportunities for BB Biotech and Basellandschaftliche
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BION and Basellandschaftliche is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Basellandschaftliche Kantonalb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basellandschaftliche 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 Basellandschaftliche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basellandschaftliche has no effect on the direction of BB Biotech i.e., BB Biotech and Basellandschaftliche go up and down completely randomly.
Pair Corralation between BB Biotech and Basellandschaftliche
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Basellandschaftliche. In addition to that, BB Biotech is 3.84 times more volatile than Basellandschaftliche Kantonalbank. It trades about -0.04 of its total potential returns per unit of risk. Basellandschaftliche Kantonalbank is currently generating about -0.02 per unit of volatility. If you would invest 85,600 in Basellandschaftliche Kantonalbank on September 3, 2024 and sell it today you would lose (400.00) from holding Basellandschaftliche Kantonalbank or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. Basellandschaftliche Kantonalb
Performance |
| Timeline |
| BB Biotech AG |
| Basellandschaftliche |
BB Biotech and Basellandschaftliche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Basellandschaftliche
The main advantage of trading using opposite BB Biotech and Basellandschaftliche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Basellandschaftliche 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 Basellandschaftliche will offset losses from the drop in Basellandschaftliche's long position.| BB Biotech vs. VAT Group AG | BB Biotech vs. Lonza Group AG | BB Biotech vs. Basilea Pharmaceutica AG | BB Biotech vs. Straumann Holding AG |
| Basellandschaftliche vs. Basler Kantonalbank | Basellandschaftliche vs. Berner Kantonalbank AG | Basellandschaftliche vs. Luzerner Kantonalbank AG | Basellandschaftliche vs. Banque Cantonale |
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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