Correlation Between BB Biotech and IShares VII
Can any of the company-specific risk be diversified away by investing in both BB Biotech and IShares VII 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 IShares VII 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 iShares VII PLC, you can compare the effects of market volatilities on BB Biotech and IShares VII 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 IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and IShares VII.
Diversification Opportunities for BB Biotech and IShares VII
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BION and IShares is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and iShares VII PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII PLC 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 IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII PLC has no effect on the direction of BB Biotech i.e., BB Biotech and IShares VII go up and down completely randomly.
Pair Corralation between BB Biotech and IShares VII
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 1.27 times more return on investment than IShares VII. However, BB Biotech is 1.27 times more volatile than iShares VII PLC. It trades about 0.02 of its potential returns per unit of risk. iShares VII PLC is currently generating about -0.03 per unit of risk. If you would invest 3,660 in BB Biotech AG on September 13, 2024 and sell it today you would earn a total of 40.00 from holding BB Biotech AG or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. iShares VII PLC
Performance |
| Timeline |
| BB Biotech AG |
| iShares VII PLC |
BB Biotech and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and IShares VII
The main advantage of trading using opposite BB Biotech and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, IShares VII 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 IShares VII will offset losses from the drop in IShares VII'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 |
| IShares VII vs. iShares Corp Bond | IShares VII vs. iShares Emerging Asia | IShares VII vs. iShares MSCI Global | IShares VII vs. iShares VII 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |