Correlation Between Intel and Biofrontera
Can any of the company-specific risk be diversified away by investing in both Intel and Biofrontera 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 Intel and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Biofrontera, you can compare the effects of market volatilities on Intel and Biofrontera 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 Intel with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Biofrontera.
Diversification Opportunities for Intel and Biofrontera
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Biofrontera is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Intel 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 Intel are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Intel i.e., Intel and Biofrontera go up and down completely randomly.
Pair Corralation between Intel and Biofrontera
Given the investment horizon of 90 days Intel is expected to generate 1.6 times less return on investment than Biofrontera. But when comparing it to its historical volatility, Intel is 3.23 times less risky than Biofrontera. It trades about 0.13 of its potential returns per unit of risk. Biofrontera is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Biofrontera on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Biofrontera or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Biofrontera
Performance |
| Timeline |
| Intel |
| Biofrontera |
Intel and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Biofrontera
The main advantage of trading using opposite Intel and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.The idea behind Intel and Biofrontera pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Biofrontera vs. Eliem Therapeutics | Biofrontera vs. HCW Biologics | Biofrontera vs. Scpharmaceuticals | Biofrontera vs. Milestone Pharmaceuticals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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