Correlation Between Hansa Biopharma and Lipum AB
Can any of the company-specific risk be diversified away by investing in both Hansa Biopharma and Lipum AB 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 Lipum AB 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 Lipum AB, you can compare the effects of market volatilities on Hansa Biopharma and Lipum AB 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 Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Biopharma and Lipum AB.
Diversification Opportunities for Hansa Biopharma and Lipum AB
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and Lipum is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum 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 Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and Lipum AB go up and down completely randomly.
Pair Corralation between Hansa Biopharma and Lipum AB
Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the Lipum AB. But the stock apears to be less risky and, when comparing its historical volatility, Hansa Biopharma AB is 1.05 times less risky than Lipum AB. The stock trades about -0.01 of its potential returns per unit of risk. The Lipum AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,425 in Lipum AB on October 21, 2024 and sell it today you would lose (35.00) from holding Lipum AB or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Biopharma AB vs. Lipum AB
Performance |
| Timeline |
| Hansa Biopharma AB |
| Lipum AB |
Hansa Biopharma and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Biopharma and Lipum AB
The main advantage of trading using opposite Hansa Biopharma and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Biopharma position performs unexpectedly, Lipum AB 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 Lipum AB will offset losses from the drop in Lipum AB's long position.| Hansa Biopharma vs. Genovis AB | Hansa Biopharma vs. Cantargia AB | Hansa Biopharma vs. Intervacc AB | Hansa Biopharma vs. C Rad AB |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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