Correlation Between BioPorto and Cantargia
Can any of the company-specific risk be diversified away by investing in both BioPorto and Cantargia 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 BioPorto and Cantargia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Cantargia AB, you can compare the effects of market volatilities on BioPorto and Cantargia 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 BioPorto with a short position of Cantargia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Cantargia.
Diversification Opportunities for BioPorto and Cantargia
Poor diversification
The 3 months correlation between BioPorto and Cantargia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Cantargia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantargia AB and BioPorto 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 BioPorto are associated (or correlated) with Cantargia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantargia AB has no effect on the direction of BioPorto i.e., BioPorto and Cantargia go up and down completely randomly.
Pair Corralation between BioPorto and Cantargia
Assuming the 90 days trading horizon BioPorto is expected to generate 0.29 times more return on investment than Cantargia. However, BioPorto is 3.4 times less risky than Cantargia. It trades about -0.51 of its potential returns per unit of risk. Cantargia AB is currently generating about -0.26 per unit of risk. If you would invest 210.00 in BioPorto on August 28, 2024 and sell it today you would lose (47.00) from holding BioPorto or give up 22.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. Cantargia AB
Performance |
| Timeline |
| BioPorto |
| Cantargia AB |
BioPorto and Cantargia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and Cantargia
The main advantage of trading using opposite BioPorto and Cantargia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Cantargia 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 Cantargia will offset losses from the drop in Cantargia's long position.| BioPorto vs. Ambu AS | BioPorto vs. Bavarian Nordic | BioPorto vs. Zealand Pharma AS | BioPorto vs. Orphazyme AS |
| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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