Correlation Between CBrain AS and BioArctic
Can any of the company-specific risk be diversified away by investing in both CBrain AS and BioArctic 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 CBrain AS and BioArctic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and BioArctic AB, you can compare the effects of market volatilities on CBrain AS and BioArctic 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 CBrain AS with a short position of BioArctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and BioArctic.
Diversification Opportunities for CBrain AS and BioArctic
Weak diversification
The 3 months correlation between CBrain and BioArctic is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and CBrain AS 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 cBrain AS are associated (or correlated) with BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of CBrain AS i.e., CBrain AS and BioArctic go up and down completely randomly.
Pair Corralation between CBrain AS and BioArctic
Assuming the 90 days trading horizon cBrain AS is expected to under-perform the BioArctic. But the stock apears to be less risky and, when comparing its historical volatility, cBrain AS is 1.78 times less risky than BioArctic. The stock trades about -0.11 of its potential returns per unit of risk. The BioArctic AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 22,800 in BioArctic AB on August 25, 2024 and sell it today you would lose (3,840) from holding BioArctic AB or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
cBrain AS vs. BioArctic AB
Performance |
| Timeline |
| cBrain AS |
| BioArctic AB |
CBrain AS and BioArctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBrain AS and BioArctic
The main advantage of trading using opposite CBrain AS and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, BioArctic 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 BioArctic will offset losses from the drop in BioArctic's long position.| CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |