Correlation Between Biotage AB and Orexo AB
Can any of the company-specific risk be diversified away by investing in both Biotage AB and Orexo 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 Orexo 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 Orexo AB, you can compare the effects of market volatilities on Biotage AB and Orexo 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 Orexo AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and Orexo AB.
Diversification Opportunities for Biotage AB and Orexo AB
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Biotage and Orexo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and Orexo AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orexo 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 Orexo AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orexo AB has no effect on the direction of Biotage AB i.e., Biotage AB and Orexo AB go up and down completely randomly.
Pair Corralation between Biotage AB and Orexo AB
Assuming the 90 days trading horizon Biotage AB is expected to generate 0.57 times more return on investment than Orexo AB. However, Biotage AB is 1.75 times less risky than Orexo AB. It trades about 0.0 of its potential returns per unit of risk. Orexo AB is currently generating about -0.01 per unit of risk. If you would invest 18,892 in Biotage AB on August 26, 2024 and sell it today you would lose (3,392) from holding Biotage AB or give up 17.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biotage AB vs. Orexo AB
Performance |
| Timeline |
| Biotage AB |
| Orexo AB |
Biotage AB and Orexo AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and Orexo AB
The main advantage of trading using opposite Biotage AB and Orexo AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, Orexo 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 Orexo AB will offset losses from the drop in Orexo AB's long position.The idea behind Biotage AB and Orexo AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Orexo AB vs. Swedish Orphan Biovitrum | Orexo AB vs. BioInvent International AB | Orexo AB vs. Camurus AB | Orexo AB vs. BioArctic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |