Correlation Between BB Biotech and PIMCO Short
Can any of the company-specific risk be diversified away by investing in both BB Biotech and PIMCO Short 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 PIMCO Short 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 PIMCO Short Term High, you can compare the effects of market volatilities on BB Biotech and PIMCO Short 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 PIMCO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and PIMCO Short.
Diversification Opportunities for BB Biotech and PIMCO Short
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BION and PIMCO is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term 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 PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of BB Biotech i.e., BB Biotech and PIMCO Short go up and down completely randomly.
Pair Corralation between BB Biotech and PIMCO Short
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 7.9 times more return on investment than PIMCO Short. However, BB Biotech is 7.9 times more volatile than PIMCO Short Term High. It trades about 0.02 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.13 per unit of risk. If you would invest 3,660 in BB Biotech AG on September 13, 2024 and sell it today you would earn a total of 40.00 from holding BB Biotech AG or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. PIMCO Short Term High
Performance |
| Timeline |
| BB Biotech AG |
| PIMCO Short Term |
BB Biotech and PIMCO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and PIMCO Short
The main advantage of trading using opposite BB Biotech and PIMCO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, PIMCO Short 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 PIMCO Short will offset losses from the drop in PIMCO Short'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 |
| PIMCO Short vs. PIMCO Short Term High | PIMCO Short vs. PIMCO Short Term High | PIMCO Short vs. PIMCO Euro Short Term | PIMCO Short vs. PIMCO Euro Short |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |