Correlation Between BB Biotech and Procimmo Real
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Procimmo Real 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 Procimmo Real 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 Procimmo Real Estate, you can compare the effects of market volatilities on BB Biotech and Procimmo Real 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 Procimmo Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Procimmo Real.
Diversification Opportunities for BB Biotech and Procimmo Real
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between BION and Procimmo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Procimmo Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procimmo Real Estate 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 Procimmo Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procimmo Real Estate has no effect on the direction of BB Biotech i.e., BB Biotech and Procimmo Real go up and down completely randomly.
Pair Corralation between BB Biotech and Procimmo Real
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Procimmo Real. In addition to that, BB Biotech is 1.53 times more volatile than Procimmo Real Estate. It trades about -0.05 of its total potential returns per unit of risk. Procimmo Real Estate is currently generating about -0.04 per unit of volatility. If you would invest 15,800 in Procimmo Real Estate on August 28, 2024 and sell it today you would lose (400.00) from holding Procimmo Real Estate or give up 2.53% 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. Procimmo Real Estate
Performance |
| Timeline |
| BB Biotech AG |
| Procimmo Real Estate |
BB Biotech and Procimmo Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Procimmo Real
The main advantage of trading using opposite BB Biotech and Procimmo Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Procimmo Real 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 Procimmo Real will offset losses from the drop in Procimmo Real'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 |
| Procimmo Real vs. SPDR Dow Jones | Procimmo Real vs. Baloise Holding AG | Procimmo Real vs. Autoneum Holding AG | Procimmo Real vs. Banque Cantonale du |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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