Correlation Between Biotage AB and Hansa Biopharma
Can any of the company-specific risk be diversified away by investing in both Biotage AB and Hansa Biopharma 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 Hansa Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotage AB and Hansa Biopharma AB, you can compare the effects of market volatilities on Biotage AB and Hansa Biopharma 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 Hansa Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and Hansa Biopharma.
Diversification Opportunities for Biotage AB and Hansa Biopharma
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Biotage and Hansa is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and Hansa Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Biopharma 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 Hansa Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Biopharma AB has no effect on the direction of Biotage AB i.e., Biotage AB and Hansa Biopharma go up and down completely randomly.
Pair Corralation between Biotage AB and Hansa Biopharma
Assuming the 90 days trading horizon Biotage AB is expected to generate 0.56 times more return on investment than Hansa Biopharma. However, Biotage AB is 1.8 times less risky than Hansa Biopharma. It trades about -0.1 of its potential returns per unit of risk. Hansa Biopharma AB is currently generating about -0.13 per unit of risk. If you would invest 15,990 in Biotage AB on September 1, 2024 and sell it today you would lose (760.00) from holding Biotage AB or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Biotage AB vs. Hansa Biopharma AB
Performance |
| Timeline |
| Biotage AB |
| Hansa Biopharma AB |
Biotage AB and Hansa Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and Hansa Biopharma
The main advantage of trading using opposite Biotage AB and Hansa Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, Hansa Biopharma 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 Hansa Biopharma will offset losses from the drop in Hansa Biopharma's long position.| Biotage AB vs. Cantargia AB | Biotage AB vs. BioArctic AB | Biotage AB vs. Oncopeptides AB | Biotage AB vs. Hansa Biopharma 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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