Correlation Between BB Biotech and Xlife Sciences
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Xlife Sciences 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 Xlife Sciences 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 Xlife Sciences AG, you can compare the effects of market volatilities on BB Biotech and Xlife Sciences 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 Xlife Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Xlife Sciences.
Diversification Opportunities for BB Biotech and Xlife Sciences
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BION and Xlife is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Xlife Sciences AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xlife Sciences 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 Xlife Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xlife Sciences AG has no effect on the direction of BB Biotech i.e., BB Biotech and Xlife Sciences go up and down completely randomly.
Pair Corralation between BB Biotech and Xlife Sciences
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Xlife Sciences. But the stock apears to be less risky and, when comparing its historical volatility, BB Biotech AG is 2.92 times less risky than Xlife Sciences. The stock trades about -0.04 of its potential returns per unit of risk. The Xlife Sciences AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,890 in Xlife Sciences AG on September 13, 2024 and sell it today you would lose (310.00) from holding Xlife Sciences AG or give up 10.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BB Biotech AG vs. Xlife Sciences AG
Performance |
| Timeline |
| BB Biotech AG |
| Xlife Sciences AG |
BB Biotech and Xlife Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and Xlife Sciences
The main advantage of trading using opposite BB Biotech and Xlife Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Xlife Sciences 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 Xlife Sciences will offset losses from the drop in Xlife Sciences' 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 |
| Xlife Sciences vs. Metall Zug AG | Xlife Sciences vs. Cembra Money Bank | Xlife Sciences vs. BB Biotech AG | Xlife Sciences vs. Basellandschaftliche Kantonalbank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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