Correlation Between BioPorto and Mendus AB
Can any of the company-specific risk be diversified away by investing in both BioPorto and Mendus AB 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 Mendus AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Mendus AB, you can compare the effects of market volatilities on BioPorto and Mendus AB 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 Mendus AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Mendus AB.
Diversification Opportunities for BioPorto and Mendus AB
Good diversification
The 3 months correlation between BioPorto and Mendus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Mendus AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mendus 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 Mendus AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mendus AB has no effect on the direction of BioPorto i.e., BioPorto and Mendus AB go up and down completely randomly.
Pair Corralation between BioPorto and Mendus AB
Assuming the 90 days trading horizon BioPorto is expected to under-perform the Mendus AB. But the stock apears to be less risky and, when comparing its historical volatility, BioPorto is 1.15 times less risky than Mendus AB. The stock trades about -0.5 of its potential returns per unit of risk. The Mendus AB is currently generating about -0.35 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Mendus AB on August 29, 2024 and sell it today you would lose (195.00) from holding Mendus AB or give up 19.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. Mendus AB
Performance |
| Timeline |
| BioPorto |
| Mendus AB |
BioPorto and Mendus AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and Mendus AB
The main advantage of trading using opposite BioPorto and Mendus AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Mendus AB 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 Mendus AB will offset losses from the drop in Mendus AB's long position.| BioPorto vs. Ambu AS | BioPorto vs. Bavarian Nordic | BioPorto vs. Zealand Pharma AS | BioPorto vs. Orphazyme 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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