Correlation Between Biogen and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Biogen and Bayer Aktiengesellscha 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 Biogen and Bayer Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Bayer Aktiengesellschaft, you can compare the effects of market volatilities on Biogen and Bayer Aktiengesellscha 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 Biogen with a short position of Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Bayer Aktiengesellscha.
Diversification Opportunities for Biogen and Bayer Aktiengesellscha
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Biogen and Bayer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft and Biogen 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 Biogen Inc are associated (or correlated) with Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of Biogen i.e., Biogen and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between Biogen and Bayer Aktiengesellscha
Assuming the 90 days horizon Biogen Inc is expected to under-perform the Bayer Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Biogen Inc is 2.56 times less risky than Bayer Aktiengesellscha. The stock trades about -0.08 of its potential returns per unit of risk. The Bayer Aktiengesellschaft is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 792.00 in Bayer Aktiengesellschaft on August 29, 2024 and sell it today you would lose (312.00) from holding Bayer Aktiengesellschaft or give up 39.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Biogen Inc vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| Biogen Inc |
| Bayer Aktiengesellschaft |
Biogen and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Bayer Aktiengesellscha
The main advantage of trading using opposite Biogen and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Bayer Aktiengesellscha 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 Bayer Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha's long position.| Biogen vs. CEOTRONICS | Biogen vs. Coor Service Management | Biogen vs. AGF Management Limited | Biogen vs. Jupiter Fund Management |
| Bayer Aktiengesellscha vs. Benchmark Electronics | Bayer Aktiengesellscha vs. BYD ELECTRONIC | Bayer Aktiengesellscha vs. Alfa Financial Software | Bayer Aktiengesellscha vs. Electronic Arts |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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