Correlation Between Cantargia and Biotage AB
Can any of the company-specific risk be diversified away by investing in both Cantargia and Biotage 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 Cantargia and Biotage AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantargia AB and Biotage AB, you can compare the effects of market volatilities on Cantargia and Biotage 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 Cantargia with a short position of Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantargia and Biotage AB.
Diversification Opportunities for Cantargia and Biotage AB
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cantargia and Biotage is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cantargia AB and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and Cantargia 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 Cantargia AB are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of Cantargia i.e., Cantargia and Biotage AB go up and down completely randomly.
Pair Corralation between Cantargia and Biotage AB
Assuming the 90 days trading horizon Cantargia AB is expected to under-perform the Biotage AB. In addition to that, Cantargia is 2.19 times more volatile than Biotage AB. It trades about -0.14 of its total potential returns per unit of risk. Biotage AB is currently generating about -0.06 per unit of volatility. If you would invest 18,590 in Biotage AB on September 1, 2024 and sell it today you would lose (3,360) from holding Biotage AB or give up 18.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Cantargia AB vs. Biotage AB
Performance |
| Timeline |
| Cantargia AB |
| Biotage AB |
Cantargia and Biotage AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantargia and Biotage AB
The main advantage of trading using opposite Cantargia and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantargia position performs unexpectedly, Biotage 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 Biotage AB will offset losses from the drop in Biotage AB's long position.| Cantargia vs. Hansa Biopharma AB | Cantargia vs. Oncopeptides AB | Cantargia vs. BioArctic AB | Cantargia vs. Alligator Bioscience AB |
| Biotage AB vs. Cantargia AB | Biotage AB vs. BioArctic AB | Biotage AB vs. Oncopeptides AB | Biotage AB vs. Hansa Biopharma 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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