Correlation Between CV Sciences and Biofrontera
Can any of the company-specific risk be diversified away by investing in both CV Sciences and Biofrontera 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 CV Sciences and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CV Sciences and Biofrontera, you can compare the effects of market volatilities on CV Sciences and Biofrontera 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 CV Sciences with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of CV Sciences and Biofrontera.
Diversification Opportunities for CV Sciences and Biofrontera
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CVSI and Biofrontera is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CV Sciences and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and CV Sciences 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 CV Sciences are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of CV Sciences i.e., CV Sciences and Biofrontera go up and down completely randomly.
Pair Corralation between CV Sciences and Biofrontera
Given the investment horizon of 90 days CV Sciences is expected to under-perform the Biofrontera. In addition to that, CV Sciences is 1.02 times more volatile than Biofrontera. It trades about -0.04 of its total potential returns per unit of risk. Biofrontera is currently generating about 0.06 per unit of volatility. If you would invest 89.00 in Biofrontera on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Biofrontera or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CV Sciences vs. Biofrontera
Performance |
| Timeline |
| CV Sciences |
| Biofrontera |
CV Sciences and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CV Sciences and Biofrontera
The main advantage of trading using opposite CV Sciences and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CV Sciences position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| CV Sciences vs. Embotelladora Andina SA | CV Sciences vs. Signet International Holdings | CV Sciences vs. National Beverage Corp | CV Sciences vs. PT Astra International |
| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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