Correlation Between Hansa Biopharma and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hansa Biopharma and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Hansa Biopharma and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Biopharma and Dow Jones.
Diversification Opportunities for Hansa Biopharma and Dow Jones
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hansa and Dow is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and Dow Jones go up and down completely randomly.
Pair Corralation between Hansa Biopharma and Dow Jones
Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the Dow Jones. In addition to that, Hansa Biopharma is 4.43 times more volatile than Dow Jones Industrial. It trades about -0.21 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 4,133,505 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 338,701 from holding Dow Jones Industrial or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Hansa Biopharma AB vs. Dow Jones Industrial
Performance |
| Timeline |
Hansa Biopharma and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hansa Biopharma AB
Pair trading matchups for Hansa Biopharma
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hansa Biopharma and Dow Jones
The main advantage of trading using opposite Hansa Biopharma and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Biopharma position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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