Correlation Between BB Biotech and PIMCO Euro
Can any of the company-specific risk be diversified away by investing in both BB Biotech and PIMCO Euro 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 PIMCO Euro 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 PIMCO Euro Short Term, you can compare the effects of market volatilities on BB Biotech and PIMCO Euro 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 PIMCO Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and PIMCO Euro.
Diversification Opportunities for BB Biotech and PIMCO Euro
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BION and PIMCO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and PIMCO Euro Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Euro Short 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 PIMCO Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Euro Short has no effect on the direction of BB Biotech i.e., BB Biotech and PIMCO Euro go up and down completely randomly.
Pair Corralation between BB Biotech and PIMCO Euro
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the PIMCO Euro. In addition to that, BB Biotech is 8.06 times more volatile than PIMCO Euro Short Term. It trades about -0.03 of its total potential returns per unit of risk. PIMCO Euro Short Term is currently generating about 0.19 per unit of volatility. If you would invest 1,008 in PIMCO Euro Short Term on December 4, 2024 and sell it today you would earn a total of 177.00 from holding PIMCO Euro Short Term or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. PIMCO Euro Short Term
Performance |
| Timeline |
| BB Biotech AG |
| PIMCO Euro Short |
BB Biotech and PIMCO Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and PIMCO Euro
The main advantage of trading using opposite BB Biotech and PIMCO Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, PIMCO Euro 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 PIMCO Euro will offset losses from the drop in PIMCO Euro'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 |
| PIMCO Euro vs. PIMCO Short Term High | PIMCO Euro vs. PIMCO Short Term High | PIMCO Euro vs. PIMCO Euro Short | PIMCO Euro vs. PIMCO Low Duration |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |