Correlation Between BioPorto and ExpreS2ion Biotech
Can any of the company-specific risk be diversified away by investing in both BioPorto and ExpreS2ion Biotech 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 ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on BioPorto and ExpreS2ion Biotech 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 ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and ExpreS2ion Biotech.
Diversification Opportunities for BioPorto and ExpreS2ion Biotech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BioPorto and ExpreS2ion is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech 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 ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of BioPorto i.e., BioPorto and ExpreS2ion Biotech go up and down completely randomly.
Pair Corralation between BioPorto and ExpreS2ion Biotech
Assuming the 90 days trading horizon BioPorto is expected to generate 0.77 times more return on investment than ExpreS2ion Biotech. However, BioPorto is 1.29 times less risky than ExpreS2ion Biotech. It trades about 0.04 of its potential returns per unit of risk. ExpreS2ion Biotech Holding is currently generating about 0.02 per unit of risk. If you would invest 149.00 in BioPorto on October 23, 2024 and sell it today you would earn a total of 2.00 from holding BioPorto or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. ExpreS2ion Biotech Holding
Performance |
| Timeline |
| BioPorto |
| ExpreS2ion Biotech |
BioPorto and ExpreS2ion Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and ExpreS2ion Biotech
The main advantage of trading using opposite BioPorto and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, ExpreS2ion Biotech 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.The idea behind BioPorto and ExpreS2ion Biotech Holding 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.| ExpreS2ion Biotech vs. Bavarian Nordic | ExpreS2ion Biotech vs. BioPorto | ExpreS2ion Biotech vs. Zaptec AS | ExpreS2ion Biotech vs. cBrain AS |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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