Correlation Between Hansa Biopharma and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Hansa Biopharma and NextCell Pharma 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 NextCell Pharma 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 NextCell Pharma AB, you can compare the effects of market volatilities on Hansa Biopharma and NextCell Pharma 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 NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Biopharma and NextCell Pharma.
Diversification Opportunities for Hansa Biopharma and NextCell Pharma
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and NextCell is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma 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 NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and NextCell Pharma go up and down completely randomly.
Pair Corralation between Hansa Biopharma and NextCell Pharma
Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the NextCell Pharma. In addition to that, Hansa Biopharma is 1.82 times more volatile than NextCell Pharma AB. It trades about -0.27 of its total potential returns per unit of risk. NextCell Pharma AB is currently generating about -0.08 per unit of volatility. If you would invest 175.00 in NextCell Pharma AB on August 29, 2024 and sell it today you would lose (6.00) from holding NextCell Pharma AB or give up 3.43% 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. NextCell Pharma AB
Performance |
| Timeline |
| Hansa Biopharma AB |
| NextCell Pharma AB |
Hansa Biopharma and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Biopharma and NextCell Pharma
The main advantage of trading using opposite Hansa Biopharma and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Biopharma position performs unexpectedly, NextCell Pharma 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 NextCell Pharma will offset losses from the drop in NextCell Pharma'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 |
| NextCell Pharma vs. Hansa Biopharma AB | NextCell Pharma vs. Xbrane Biopharma AB | NextCell Pharma vs. BioArctic 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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