Correlation Between BB Biotech and Nebag Ag
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Nebag Ag 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 Nebag Ag 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 Nebag ag, you can compare the effects of market volatilities on BB Biotech and Nebag Ag 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 Nebag Ag. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Nebag Ag.
Diversification Opportunities for BB Biotech and Nebag Ag
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BION and Nebag is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Nebag ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebag 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 Nebag Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebag ag has no effect on the direction of BB Biotech i.e., BB Biotech and Nebag Ag go up and down completely randomly.
Pair Corralation between BB Biotech and Nebag Ag
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 1.74 times more return on investment than Nebag Ag. However, BB Biotech is 1.74 times more volatile than Nebag ag. It trades about 0.07 of its potential returns per unit of risk. Nebag ag is currently generating about -0.08 per unit of risk. If you would invest 3,650 in BB Biotech AG on September 1, 2024 and sell it today you would earn a total of 85.00 from holding BB Biotech AG or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
BB Biotech AG vs. Nebag ag
Performance |
| Timeline |
| BB Biotech AG |
| Nebag ag |
BB Biotech and Nebag Ag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Nebag Ag
The main advantage of trading using opposite BB Biotech and Nebag Ag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Nebag Ag 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 Nebag Ag will offset losses from the drop in Nebag Ag's long position.The idea behind BB Biotech AG and Nebag ag pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nebag Ag vs. Bachem Holding AG | Nebag Ag vs. Kudelski | Nebag Ag vs. Alpine Select AG | Nebag Ag 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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