Correlation Between BB Biotech and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Lyxor MSCI 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 Lyxor MSCI 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 Lyxor MSCI China, you can compare the effects of market volatilities on BB Biotech and Lyxor MSCI 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 Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Lyxor MSCI.
Diversification Opportunities for BB Biotech and Lyxor MSCI
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between BION and Lyxor is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Lyxor MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI China 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 Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI China has no effect on the direction of BB Biotech i.e., BB Biotech and Lyxor MSCI go up and down completely randomly.
Pair Corralation between BB Biotech and Lyxor MSCI
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Lyxor MSCI. But the stock apears to be less risky and, when comparing its historical volatility, BB Biotech AG is 1.21 times less risky than Lyxor MSCI. The stock trades about -0.04 of its potential returns per unit of risk. The Lyxor MSCI China is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,527 in Lyxor MSCI China on September 20, 2024 and sell it today you would earn a total of 34.00 from holding Lyxor MSCI China or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. Lyxor MSCI China
Performance |
| Timeline |
| BB Biotech AG |
| Lyxor MSCI China |
BB Biotech and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Lyxor MSCI
The main advantage of trading using opposite BB Biotech and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Lyxor MSCI 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 Lyxor MSCI will offset losses from the drop in Lyxor MSCI'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 |
| Lyxor MSCI vs. Baloise Holding AG | Lyxor MSCI vs. 21Shares Polkadot ETP | Lyxor MSCI vs. UBS ETF MSCI | Lyxor MSCI 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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