Correlation Between Isofol Medical and BioInvent International
Can any of the company-specific risk be diversified away by investing in both Isofol Medical and BioInvent International 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 Isofol Medical and BioInvent International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isofol Medical AB and BioInvent International AB, you can compare the effects of market volatilities on Isofol Medical and BioInvent International 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 Isofol Medical with a short position of BioInvent International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isofol Medical and BioInvent International.
Diversification Opportunities for Isofol Medical and BioInvent International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Isofol and BioInvent is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Isofol Medical AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International and Isofol Medical 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 Isofol Medical AB are associated (or correlated) with BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of Isofol Medical i.e., Isofol Medical and BioInvent International go up and down completely randomly.
Pair Corralation between Isofol Medical and BioInvent International
Assuming the 90 days trading horizon Isofol Medical AB is expected to generate 2.53 times more return on investment than BioInvent International. However, Isofol Medical is 2.53 times more volatile than BioInvent International AB. It trades about 0.09 of its potential returns per unit of risk. BioInvent International AB is currently generating about 0.08 per unit of risk. If you would invest 52.00 in Isofol Medical AB on September 1, 2024 and sell it today you would earn a total of 247.00 from holding Isofol Medical AB or generate 475.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Isofol Medical AB vs. BioInvent International AB
Performance |
| Timeline |
| Isofol Medical AB |
| BioInvent International |
Isofol Medical and BioInvent International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isofol Medical and BioInvent International
The main advantage of trading using opposite Isofol Medical and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isofol Medical position performs unexpectedly, BioInvent International 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 BioInvent International will offset losses from the drop in BioInvent International's long position.| Isofol Medical vs. XSpray Pharma AB | Isofol Medical vs. Oncopeptides AB | Isofol Medical vs. Hansa Biopharma AB | Isofol Medical vs. Alligator Bioscience AB |
| BioInvent International vs. Hansa Biopharma AB | BioInvent International vs. Saniona AB | BioInvent International vs. Active Biotech AB | BioInvent International vs. Oncopeptides 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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