Correlation Between BB Biotech and Mobilezone
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Mobilezone 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 Mobilezone 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 mobilezone ag, you can compare the effects of market volatilities on BB Biotech and Mobilezone 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 Mobilezone. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Mobilezone.
Diversification Opportunities for BB Biotech and Mobilezone
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BION and Mobilezone is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and mobilezone ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone ag 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 Mobilezone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone ag has no effect on the direction of BB Biotech i.e., BB Biotech and Mobilezone go up and down completely randomly.
Pair Corralation between BB Biotech and Mobilezone
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Mobilezone. In addition to that, BB Biotech is 1.6 times more volatile than mobilezone ag. It trades about -0.05 of its total potential returns per unit of risk. mobilezone ag is currently generating about 0.09 per unit of volatility. If you would invest 1,346 in mobilezone ag on August 28, 2024 and sell it today you would earn a total of 60.00 from holding mobilezone ag or generate 4.46% 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. mobilezone ag
Performance |
| Timeline |
| BB Biotech AG |
| mobilezone ag |
BB Biotech and Mobilezone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Mobilezone
The main advantage of trading using opposite BB Biotech and Mobilezone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Mobilezone 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 Mobilezone will offset losses from the drop in Mobilezone'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 |
| Mobilezone vs. Procimmo Real Estate | Mobilezone vs. SPDR Dow Jones | Mobilezone vs. Baloise Holding AG | Mobilezone vs. Autoneum Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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