Correlation Between Clinica Baviera and Faes Farma
Can any of the company-specific risk be diversified away by investing in both Clinica Baviera and Faes Farma 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 Clinica Baviera and Faes Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clinica Baviera and Faes Farma SA, you can compare the effects of market volatilities on Clinica Baviera and Faes Farma 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 Clinica Baviera with a short position of Faes Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clinica Baviera and Faes Farma.
Diversification Opportunities for Clinica Baviera and Faes Farma
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clinica and Faes is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Clinica Baviera and Faes Farma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faes Farma SA and Clinica Baviera 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 Clinica Baviera are associated (or correlated) with Faes Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faes Farma SA has no effect on the direction of Clinica Baviera i.e., Clinica Baviera and Faes Farma go up and down completely randomly.
Pair Corralation between Clinica Baviera and Faes Farma
Assuming the 90 days trading horizon Clinica Baviera is expected to under-perform the Faes Farma. In addition to that, Clinica Baviera is 3.3 times more volatile than Faes Farma SA. It trades about -0.05 of its total potential returns per unit of risk. Faes Farma SA is currently generating about 0.04 per unit of volatility. If you would invest 354.00 in Faes Farma SA on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Faes Farma SA or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clinica Baviera vs. Faes Farma SA
Performance |
| Timeline |
| Clinica Baviera |
| Faes Farma SA |
Clinica Baviera and Faes Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clinica Baviera and Faes Farma
The main advantage of trading using opposite Clinica Baviera and Faes Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clinica Baviera position performs unexpectedly, Faes Farma 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 Faes Farma will offset losses from the drop in Faes Farma's long position.| Clinica Baviera vs. Faes Farma SA | Clinica Baviera vs. Miquel y Costas | Clinica Baviera vs. Azkoyen | Clinica Baviera vs. Vidrala SA |
| Faes Farma vs. ENCE Energa y | Faes Farma vs. Almirall SA | Faes Farma vs. Viscofan | Faes Farma vs. Vidrala 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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