Correlation Between BB Biotech and Amundi Index
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on BB Biotech and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Amundi Index.
Diversification Opportunities for BB Biotech and Amundi Index
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between BION and Amundi is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of BB Biotech i.e., BB Biotech and Amundi Index go up and down completely randomly.
Pair Corralation between BB Biotech and Amundi Index
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Amundi Index. In addition to that, BB Biotech is 1.75 times more volatile than Amundi Index Solutions. It trades about -0.21 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.03 per unit of volatility. If you would invest 3,053,500 in Amundi Index Solutions on September 12, 2024 and sell it today you would lose (14,000) from holding Amundi Index Solutions or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. Amundi Index Solutions
Performance |
| Timeline |
| BB Biotech AG |
| Amundi Index Solutions |
BB Biotech and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Amundi Index
The main advantage of trading using opposite BB Biotech and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index'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 |
| Amundi Index vs. Baloise Holding AG | Amundi Index vs. 21Shares Polkadot ETP | Amundi Index vs. UBS ETF MSCI | Amundi Index vs. BB Biotech AG |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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