Correlation Between Hansa Biopharma and BioArctic
Can any of the company-specific risk be diversified away by investing in both Hansa Biopharma 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 Hansa Biopharma and BioArctic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Biopharma AB and BioArctic AB, you can compare the effects of market volatilities on Hansa Biopharma 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 Hansa Biopharma with a short position of BioArctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Biopharma and BioArctic.
Diversification Opportunities for Hansa Biopharma and BioArctic
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hansa and BioArctic is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Hansa Biopharma 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 Hansa Biopharma AB 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 Hansa Biopharma i.e., Hansa Biopharma and BioArctic go up and down completely randomly.
Pair Corralation between Hansa Biopharma and BioArctic
Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the BioArctic. But the stock apears to be less risky and, when comparing its historical volatility, Hansa Biopharma AB is 1.22 times less risky than BioArctic. The stock trades about -0.07 of its potential returns per unit of risk. The BioArctic AB is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 24,260 in BioArctic AB on August 29, 2024 and sell it today you would lose (5,510) from holding BioArctic AB or give up 22.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Biopharma AB vs. BioArctic AB
Performance |
| Timeline |
| Hansa Biopharma AB |
| BioArctic AB |
Hansa Biopharma and BioArctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Biopharma and BioArctic
The main advantage of trading using opposite Hansa Biopharma and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Biopharma 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.| Hansa Biopharma vs. Oncopeptides AB | Hansa Biopharma vs. ExpreS2ion Biotech Holding | Hansa Biopharma vs. BioInvent International AB | Hansa Biopharma vs. Zealand Pharma AS |
| BioArctic vs. Oncopeptides AB | BioArctic vs. Camurus AB | BioArctic vs. Hansa Biopharma AB | BioArctic vs. Cantargia AB |
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.
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