Correlation Between Biotage AB and AddLife AB
Can any of the company-specific risk be diversified away by investing in both Biotage AB and AddLife 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 Biotage AB and AddLife AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotage AB and AddLife AB, you can compare the effects of market volatilities on Biotage AB and AddLife 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 Biotage AB with a short position of AddLife AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and AddLife AB.
Diversification Opportunities for Biotage AB and AddLife AB
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Biotage and AddLife is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and AddLife AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddLife AB and Biotage AB 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 Biotage AB are associated (or correlated) with AddLife AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddLife AB has no effect on the direction of Biotage AB i.e., Biotage AB and AddLife AB go up and down completely randomly.
Pair Corralation between Biotage AB and AddLife AB
Assuming the 90 days trading horizon Biotage AB is expected to generate 24.47 times less return on investment than AddLife AB. But when comparing it to its historical volatility, Biotage AB is 1.09 times less risky than AddLife AB. It trades about 0.0 of its potential returns per unit of risk. AddLife AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,019 in AddLife AB on August 30, 2024 and sell it today you would earn a total of 2,051 from holding AddLife AB or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biotage AB vs. AddLife AB
Performance |
| Timeline |
| Biotage AB |
| AddLife AB |
Biotage AB and AddLife AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and AddLife AB
The main advantage of trading using opposite Biotage AB and AddLife AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, AddLife 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 AddLife AB will offset losses from the drop in AddLife AB's long position.| Biotage AB vs. GomSpace Group AB | Biotage AB vs. Hansa Biopharma AB | Biotage AB vs. Zealand Pharma AS | Biotage AB vs. BioInvent International AB |
| AddLife AB vs. Mantex AB | AddLife AB vs. Genovis AB | AddLife AB vs. Vestum AB | AddLife AB vs. Karolinska Development 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |