Correlation Between Hansa Biopharma and Scibase AB
Can any of the company-specific risk be diversified away by investing in both Hansa Biopharma and Scibase 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 Scibase 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 Scibase AB, you can compare the effects of market volatilities on Hansa Biopharma and Scibase 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 Scibase AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Biopharma and Scibase AB.
Diversification Opportunities for Hansa Biopharma and Scibase AB
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hansa and Scibase is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and Scibase AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scibase 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 Scibase AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scibase AB has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and Scibase AB go up and down completely randomly.
Pair Corralation between Hansa Biopharma and Scibase AB
Assuming the 90 days trading horizon Hansa Biopharma AB is expected to generate 0.82 times more return on investment than Scibase AB. However, Hansa Biopharma AB is 1.21 times less risky than Scibase AB. It trades about 0.0 of its potential returns per unit of risk. Scibase AB is currently generating about -0.06 per unit of risk. If you would invest 4,984 in Hansa Biopharma AB on September 14, 2024 and sell it today you would lose (1,944) from holding Hansa Biopharma AB or give up 39.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Biopharma AB vs. Scibase AB
Performance |
| Timeline |
| Hansa Biopharma AB |
| Scibase AB |
Hansa Biopharma and Scibase AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Biopharma and Scibase AB
The main advantage of trading using opposite Hansa Biopharma and Scibase AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Biopharma position performs unexpectedly, Scibase 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 Scibase AB will offset losses from the drop in Scibase AB'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 |
| Scibase AB vs. Oncopeptides AB | Scibase AB vs. Hansa Biopharma AB | Scibase AB vs. Cantargia AB | Scibase AB vs. Camurus 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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