Correlation Between Basler Kantonalbank and BB Biotech
Can any of the company-specific risk be diversified away by investing in both Basler Kantonalbank and BB Biotech 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 Basler Kantonalbank and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basler Kantonalbank and BB Biotech AG, you can compare the effects of market volatilities on Basler Kantonalbank and BB Biotech 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 Basler Kantonalbank with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basler Kantonalbank and BB Biotech.
Diversification Opportunities for Basler Kantonalbank and BB Biotech
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basler and BION is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Basler Kantonalbank and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and Basler Kantonalbank 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 Basler Kantonalbank are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of Basler Kantonalbank i.e., Basler Kantonalbank and BB Biotech go up and down completely randomly.
Pair Corralation between Basler Kantonalbank and BB Biotech
Assuming the 90 days trading horizon Basler Kantonalbank is expected to under-perform the BB Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Basler Kantonalbank is 4.03 times less risky than BB Biotech. The stock trades about -0.03 of its potential returns per unit of risk. The BB Biotech AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,640 in BB Biotech AG on August 28, 2024 and sell it today you would earn a total of 75.00 from holding BB Biotech AG or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basler Kantonalbank vs. BB Biotech AG
Performance |
| Timeline |
| Basler Kantonalbank |
| BB Biotech AG |
Basler Kantonalbank and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basler Kantonalbank and BB Biotech
The main advantage of trading using opposite Basler Kantonalbank and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basler Kantonalbank position performs unexpectedly, BB Biotech 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 BB Biotech will offset losses from the drop in BB Biotech's long position.| Basler Kantonalbank vs. Swissquote Group Holding | Basler Kantonalbank vs. Banque Cantonale | Basler Kantonalbank vs. Barry Callebaut AG | Basler Kantonalbank vs. Vontobel Holding |
| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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