Correlation Between Biotage AB and BioInvent International
Can any of the company-specific risk be diversified away by investing in both Biotage AB and BioInvent International 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 BioInvent International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotage AB and BioInvent International AB, you can compare the effects of market volatilities on Biotage AB and BioInvent International 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 BioInvent International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and BioInvent International.
Diversification Opportunities for Biotage AB and BioInvent International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biotage and BioInvent is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International 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 BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of Biotage AB i.e., Biotage AB and BioInvent International go up and down completely randomly.
Pair Corralation between Biotage AB and BioInvent International
Assuming the 90 days trading horizon Biotage AB is expected to under-perform the BioInvent International. But the stock apears to be less risky and, when comparing its historical volatility, Biotage AB is 1.54 times less risky than BioInvent International. The stock trades about -0.1 of its potential returns per unit of risk. The BioInvent International AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,330 in BioInvent International AB on September 1, 2024 and sell it today you would lose (30.00) from holding BioInvent International AB or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Biotage AB vs. BioInvent International AB
Performance |
| Timeline |
| Biotage AB |
| BioInvent International |
Biotage AB and BioInvent International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and BioInvent International
The main advantage of trading using opposite Biotage AB and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, BioInvent International 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 BioInvent International will offset losses from the drop in BioInvent International's long position.| Biotage AB vs. Cantargia AB | Biotage AB vs. BioArctic AB | Biotage AB vs. Oncopeptides AB | Biotage AB vs. Hansa Biopharma AB |
| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides 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 Stocks Directory module to find actively traded stocks across global markets.
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