Correlation Between Basilea Pharmaceutica and Implenia
Can any of the company-specific risk be diversified away by investing in both Basilea Pharmaceutica and Implenia 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 Basilea Pharmaceutica and Implenia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basilea Pharmaceutica AG and Implenia AG, you can compare the effects of market volatilities on Basilea Pharmaceutica and Implenia 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 Basilea Pharmaceutica with a short position of Implenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basilea Pharmaceutica and Implenia.
Diversification Opportunities for Basilea Pharmaceutica and Implenia
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Basilea and Implenia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Basilea Pharmaceutica AG and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Basilea Pharmaceutica 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 Basilea Pharmaceutica AG are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Basilea Pharmaceutica i.e., Basilea Pharmaceutica and Implenia go up and down completely randomly.
Pair Corralation between Basilea Pharmaceutica and Implenia
Assuming the 90 days trading horizon Basilea Pharmaceutica AG is expected to generate 1.0 times more return on investment than Implenia. However, Basilea Pharmaceutica is 1.0 times more volatile than Implenia AG. It trades about 0.0 of its potential returns per unit of risk. Implenia AG is currently generating about -0.05 per unit of risk. If you would invest 4,550 in Basilea Pharmaceutica AG on September 4, 2024 and sell it today you would lose (455.00) from holding Basilea Pharmaceutica AG or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basilea Pharmaceutica AG vs. Implenia AG
Performance |
| Timeline |
| Basilea Pharmaceutica |
| Implenia AG |
Basilea Pharmaceutica and Implenia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basilea Pharmaceutica and Implenia
The main advantage of trading using opposite Basilea Pharmaceutica and Implenia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basilea Pharmaceutica position performs unexpectedly, Implenia 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 Implenia will offset losses from the drop in Implenia's long position.| Basilea Pharmaceutica vs. VAT Group AG | Basilea Pharmaceutica vs. Lonza Group AG | Basilea Pharmaceutica vs. Straumann Holding AG |
| Implenia vs. Helvetia Holding AG | Implenia vs. Bucher Industries AG | Implenia vs. Hubersuhner AG | Implenia vs. Stadler Rail AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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