Correlation Between Khiron Life and Biofrontera
Can any of the company-specific risk be diversified away by investing in both Khiron Life 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 Khiron Life and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khiron Life Sciences and Biofrontera, you can compare the effects of market volatilities on Khiron Life 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 Khiron Life with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Biofrontera.
Diversification Opportunities for Khiron Life and Biofrontera
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Khiron and Biofrontera is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Khiron Life 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 Khiron Life Sciences 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 Khiron Life i.e., Khiron Life and Biofrontera go up and down completely randomly.
Pair Corralation between Khiron Life and Biofrontera
Assuming the 90 days horizon Khiron Life Sciences is expected to generate 8.49 times more return on investment than Biofrontera. However, Khiron Life is 8.49 times more volatile than Biofrontera. It trades about 0.06 of its potential returns per unit of risk. Biofrontera is currently generating about -0.05 per unit of risk. If you would invest 5.70 in Khiron Life Sciences on August 26, 2024 and sell it today you would lose (5.69) from holding Khiron Life Sciences or give up 99.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Khiron Life Sciences vs. Biofrontera
Performance |
| Timeline |
| Khiron Life Sciences |
| Biofrontera |
Khiron Life and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khiron Life and Biofrontera
The main advantage of trading using opposite Khiron Life and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life 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.| Khiron Life vs. Blueberries Medical Corp | Khiron Life vs. Speakeasy Cannabis Club | Khiron Life vs. City View Green | Khiron Life vs. Benchmark Botanics |
| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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