Correlation Between MULTI UNITS and BB Biotech
Can any of the company-specific risk be diversified away by investing in both MULTI UNITS and BB Biotech 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 MULTI UNITS and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MULTI UNITS LUXEMBOURG and BB Biotech AG, you can compare the effects of market volatilities on MULTI UNITS and BB Biotech 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 MULTI UNITS with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MULTI UNITS and BB Biotech.
Diversification Opportunities for MULTI UNITS and BB Biotech
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MULTI and BION is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MULTI UNITS LUXEMBOURG and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and MULTI UNITS 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 MULTI UNITS LUXEMBOURG are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of MULTI UNITS i.e., MULTI UNITS and BB Biotech go up and down completely randomly.
Pair Corralation between MULTI UNITS and BB Biotech
Assuming the 90 days trading horizon MULTI UNITS LUXEMBOURG is expected to generate 0.7 times more return on investment than BB Biotech. However, MULTI UNITS LUXEMBOURG is 1.43 times less risky than BB Biotech. It trades about 0.1 of its potential returns per unit of risk. BB Biotech AG is currently generating about -0.04 per unit of risk. If you would invest 16,690 in MULTI UNITS LUXEMBOURG on September 19, 2024 and sell it today you would earn a total of 1,910 from holding MULTI UNITS LUXEMBOURG or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MULTI UNITS LUXEMBOURG vs. BB Biotech AG
Performance |
| Timeline |
| MULTI UNITS LUXEMBOURG |
| BB Biotech AG |
MULTI UNITS and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MULTI UNITS and BB Biotech
The main advantage of trading using opposite MULTI UNITS and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MULTI UNITS position performs unexpectedly, BB Biotech 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 BB Biotech will offset losses from the drop in BB Biotech's long position.| MULTI UNITS vs. Baloise Holding AG | MULTI UNITS vs. 21Shares Polkadot ETP | MULTI UNITS vs. UBS ETF MSCI | MULTI UNITS vs. BB Biotech AG |
| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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