Correlation Between DBV Technologies and Zealand Pharma
Can any of the company-specific risk be diversified away by investing in both DBV Technologies and Zealand Pharma 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 DBV Technologies and Zealand Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBV Technologies and Zealand Pharma AS, you can compare the effects of market volatilities on DBV Technologies and Zealand Pharma 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 DBV Technologies with a short position of Zealand Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBV Technologies and Zealand Pharma.
Diversification Opportunities for DBV Technologies and Zealand Pharma
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DBV and Zealand is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies and Zealand Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zealand Pharma AS and DBV Technologies 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 DBV Technologies are associated (or correlated) with Zealand Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zealand Pharma AS has no effect on the direction of DBV Technologies i.e., DBV Technologies and Zealand Pharma go up and down completely randomly.
Pair Corralation between DBV Technologies and Zealand Pharma
Given the investment horizon of 90 days DBV Technologies is expected to under-perform the Zealand Pharma. In addition to that, DBV Technologies is 1.6 times more volatile than Zealand Pharma AS. It trades about -0.03 of its total potential returns per unit of risk. Zealand Pharma AS is currently generating about 0.05 per unit of volatility. If you would invest 9,106 in Zealand Pharma AS on September 2, 2024 and sell it today you would earn a total of 1,299 from holding Zealand Pharma AS or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
DBV Technologies vs. Zealand Pharma AS
Performance |
| Timeline |
| DBV Technologies |
| Zealand Pharma AS |
DBV Technologies and Zealand Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBV Technologies and Zealand Pharma
The main advantage of trading using opposite DBV Technologies and Zealand Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBV Technologies position performs unexpectedly, Zealand Pharma 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 Zealand Pharma will offset losses from the drop in Zealand Pharma's long position.| DBV Technologies vs. Oric Pharmaceuticals | DBV Technologies vs. Lyra Therapeutics | DBV Technologies vs. Inhibrx | DBV Technologies vs. ESSA Pharma |
| Zealand Pharma vs. NewAmsterdam Pharma | Zealand Pharma vs. Portage Biotech | Zealand Pharma vs. DBV Technologies | Zealand Pharma vs. NewAmsterdam Pharma |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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