Correlation Between DnB ASA and PCI Biotech
Can any of the company-specific risk be diversified away by investing in both DnB ASA and PCI Biotech 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 DnB ASA and PCI Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DnB ASA and PCI Biotech Holding, you can compare the effects of market volatilities on DnB ASA and PCI Biotech 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 DnB ASA with a short position of PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of DnB ASA and PCI Biotech.
Diversification Opportunities for DnB ASA and PCI Biotech
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DnB and PCI is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding DnB ASA and PCI Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI Biotech Holding and DnB ASA 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 DnB ASA are associated (or correlated) with PCI Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI Biotech Holding has no effect on the direction of DnB ASA i.e., DnB ASA and PCI Biotech go up and down completely randomly.
Pair Corralation between DnB ASA and PCI Biotech
Assuming the 90 days trading horizon DnB ASA is expected to generate 1.67 times less return on investment than PCI Biotech. But when comparing it to its historical volatility, DnB ASA is 6.58 times less risky than PCI Biotech. It trades about 0.09 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 205.00 in PCI Biotech Holding on August 29, 2024 and sell it today you would lose (21.00) from holding PCI Biotech Holding or give up 10.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DnB ASA vs. PCI Biotech Holding
Performance |
| Timeline |
| DnB ASA |
| PCI Biotech Holding |
DnB ASA and PCI Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DnB ASA and PCI Biotech
The main advantage of trading using opposite DnB ASA and PCI Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DnB ASA position performs unexpectedly, PCI Biotech 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 PCI Biotech will offset losses from the drop in PCI Biotech's long position.| DnB ASA vs. Telenor ASA | DnB ASA vs. Storebrand ASA | DnB ASA vs. Orkla ASA | DnB ASA vs. Gjensidige Forsikring ASA |
| PCI Biotech vs. AutoStore Holdings | PCI Biotech vs. Arcticzymes Technologies ASA | PCI Biotech vs. ContextVision AB | PCI Biotech vs. Airthings ASA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |