Correlation Between Basilea Pharmaceutica and Meyer Burger
Can any of the company-specific risk be diversified away by investing in both Basilea Pharmaceutica and Meyer Burger 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 Meyer Burger 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 Meyer Burger Tech, you can compare the effects of market volatilities on Basilea Pharmaceutica and Meyer Burger 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 Meyer Burger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basilea Pharmaceutica and Meyer Burger.
Diversification Opportunities for Basilea Pharmaceutica and Meyer Burger
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Basilea and Meyer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Basilea Pharmaceutica AG and Meyer Burger Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meyer Burger Tech 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 Meyer Burger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meyer Burger Tech has no effect on the direction of Basilea Pharmaceutica i.e., Basilea Pharmaceutica and Meyer Burger go up and down completely randomly.
Pair Corralation between Basilea Pharmaceutica and Meyer Burger
Assuming the 90 days trading horizon Basilea Pharmaceutica AG is expected to generate 0.08 times more return on investment than Meyer Burger. However, Basilea Pharmaceutica AG is 12.38 times less risky than Meyer Burger. It trades about -0.26 of its potential returns per unit of risk. Meyer Burger Tech is currently generating about -0.1 per unit of risk. If you would invest 4,650 in Basilea Pharmaceutica AG on August 28, 2024 and sell it today you would lose (590.00) from holding Basilea Pharmaceutica AG or give up 12.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basilea Pharmaceutica AG vs. Meyer Burger Tech
Performance |
| Timeline |
| Basilea Pharmaceutica |
| Meyer Burger Tech |
Basilea Pharmaceutica and Meyer Burger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basilea Pharmaceutica and Meyer Burger
The main advantage of trading using opposite Basilea Pharmaceutica and Meyer Burger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basilea Pharmaceutica position performs unexpectedly, Meyer Burger 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 Meyer Burger will offset losses from the drop in Meyer Burger's long position.| Basilea Pharmaceutica vs. Santhera Pharmaceuticals Holding | Basilea Pharmaceutica vs. Idorsia | Basilea Pharmaceutica vs. Molecular Partners AG | Basilea Pharmaceutica vs. Evolva Holding SA |
| Meyer Burger vs. Santhera Pharmaceuticals Holding | Meyer Burger vs. Newron Pharmaceuticals SpA | Meyer Burger vs. Basilea Pharmaceutica AG | Meyer Burger vs. Evolva Holding SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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