Correlation Between Helvetia Holding and BB Biotech
Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and BB 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 Helvetia Holding and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helvetia Holding AG and BB Biotech AG, you can compare the effects of market volatilities on Helvetia Holding and BB 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 Helvetia Holding with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and BB Biotech.
Diversification Opportunities for Helvetia Holding and BB Biotech
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Helvetia and BION is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and Helvetia Holding 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 Helvetia Holding AG are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and BB Biotech go up and down completely randomly.
Pair Corralation between Helvetia Holding and BB Biotech
Assuming the 90 days trading horizon Helvetia Holding AG is expected to generate 0.84 times more return on investment than BB Biotech. However, Helvetia Holding AG is 1.19 times less risky than BB Biotech. It trades about 0.08 of its potential returns per unit of risk. BB Biotech AG is currently generating about -0.04 per unit of risk. If you would invest 9,762 in Helvetia Holding AG on August 29, 2024 and sell it today you would earn a total of 5,428 from holding Helvetia Holding AG or generate 55.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helvetia Holding AG vs. BB Biotech AG
Performance |
| Timeline |
| Helvetia Holding |
| BB Biotech AG |
Helvetia Holding and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helvetia Holding and BB Biotech
The main advantage of trading using opposite Helvetia Holding and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, BB 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 BB Biotech will offset losses from the drop in BB Biotech's long position.| Helvetia Holding vs. Swiss Life Holding | Helvetia Holding vs. Baloise Holding AG | Helvetia Holding vs. Swiss Re AG | Helvetia Holding vs. Zurich Insurance Group |
| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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