Correlation Between BB Biotech and IShares Asia
Can any of the company-specific risk be diversified away by investing in both BB Biotech and IShares Asia 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 Asia 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 Asia Property, you can compare the effects of market volatilities on BB Biotech and IShares Asia 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 Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and IShares Asia.
Diversification Opportunities for BB Biotech and IShares Asia
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BION and IShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and iShares Asia Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Property 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 Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Property has no effect on the direction of BB Biotech i.e., BB Biotech and IShares Asia go up and down completely randomly.
Pair Corralation between BB Biotech and IShares Asia
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the IShares Asia. In addition to that, BB Biotech is 1.5 times more volatile than iShares Asia Property. It trades about -0.02 of its total potential returns per unit of risk. iShares Asia Property is currently generating about -0.02 per unit of volatility. If you would invest 2,005 in iShares Asia Property on September 14, 2024 and sell it today you would lose (107.00) from holding iShares Asia Property or give up 5.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. iShares Asia Property
Performance |
| Timeline |
| BB Biotech AG |
| iShares Asia Property |
BB Biotech and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and IShares Asia
The main advantage of trading using opposite BB Biotech and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, IShares Asia 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 Asia will offset losses from the drop in IShares Asia'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 Asia vs. iShares Corp Bond | IShares Asia vs. iShares Emerging Asia | IShares Asia vs. iShares MSCI Global | IShares Asia 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |