Correlation Between Biotage AB and CellaVision
Can any of the company-specific risk be diversified away by investing in both Biotage AB and CellaVision 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 CellaVision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotage AB and CellaVision AB, you can compare the effects of market volatilities on Biotage AB and CellaVision 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 CellaVision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and CellaVision.
Diversification Opportunities for Biotage AB and CellaVision
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biotage and CellaVision is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision 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 CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Biotage AB i.e., Biotage AB and CellaVision go up and down completely randomly.
Pair Corralation between Biotage AB and CellaVision
Assuming the 90 days trading horizon Biotage AB is expected to generate 1.62 times less return on investment than CellaVision. But when comparing it to its historical volatility, Biotage AB is 1.27 times less risky than CellaVision. It trades about 0.02 of its potential returns per unit of risk. CellaVision AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19,950 in CellaVision AB on August 28, 2024 and sell it today you would earn a total of 2,200 from holding CellaVision AB or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Biotage AB vs. CellaVision AB
Performance |
| Timeline |
| Biotage AB |
| CellaVision AB |
Biotage AB and CellaVision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and CellaVision
The main advantage of trading using opposite Biotage AB and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, CellaVision 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 CellaVision will offset losses from the drop in CellaVision's long position.| Biotage AB vs. CellaVision AB | Biotage AB vs. Vitrolife AB | Biotage AB vs. Sectra AB | Biotage AB vs. BioGaia AB |
| CellaVision vs. Vitrolife AB | CellaVision vs. Biotage AB | CellaVision vs. Sectra AB | CellaVision vs. BioGaia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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