Correlation Between Brent Crude and BIOGEN
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By analyzing existing cross correlation between Brent Crude Oil and BIOGEN INC, you can compare the effects of market volatilities on Brent Crude and BIOGEN 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 Brent Crude with a short position of BIOGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brent Crude and BIOGEN.
Diversification Opportunities for Brent Crude and BIOGEN
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brent and BIOGEN is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Brent Crude Oil and BIOGEN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIOGEN INC and Brent Crude 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 Brent Crude Oil are associated (or correlated) with BIOGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIOGEN INC has no effect on the direction of Brent Crude i.e., Brent Crude and BIOGEN go up and down completely randomly.
Pair Corralation between Brent Crude and BIOGEN
Assuming the 90 days horizon Brent Crude Oil is expected to generate 2.39 times more return on investment than BIOGEN. However, Brent Crude is 2.39 times more volatile than BIOGEN INC. It trades about 0.01 of its potential returns per unit of risk. BIOGEN INC is currently generating about -0.08 per unit of risk. If you would invest 7,593 in Brent Crude Oil on November 2, 2024 and sell it today you would lose (4.00) from holding Brent Crude Oil or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brent Crude Oil vs. BIOGEN INC
Performance |
| Timeline |
| Brent Crude Oil |
| BIOGEN INC |
Brent Crude and BIOGEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brent Crude and BIOGEN
The main advantage of trading using opposite Brent Crude and BIOGEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brent Crude position performs unexpectedly, BIOGEN 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 BIOGEN will offset losses from the drop in BIOGEN's long position.| Brent Crude vs. Natural Gas | Brent Crude vs. Lean Hogs Futures | Brent Crude vs. Live Cattle Futures | Brent Crude vs. Lumber Futures |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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