Correlation Between Meyer Burger and Basilea Pharmaceutica
Can any of the company-specific risk be diversified away by investing in both Meyer Burger and Basilea Pharmaceutica 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 Meyer Burger and Basilea Pharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meyer Burger Tech and Basilea Pharmaceutica AG, you can compare the effects of market volatilities on Meyer Burger and Basilea Pharmaceutica 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 Meyer Burger with a short position of Basilea Pharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meyer Burger and Basilea Pharmaceutica.
Diversification Opportunities for Meyer Burger and Basilea Pharmaceutica
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meyer and Basilea is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Meyer Burger Tech and Basilea Pharmaceutica AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basilea Pharmaceutica and Meyer Burger 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 Meyer Burger Tech are associated (or correlated) with Basilea Pharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basilea Pharmaceutica has no effect on the direction of Meyer Burger i.e., Meyer Burger and Basilea Pharmaceutica go up and down completely randomly.
Pair Corralation between Meyer Burger and Basilea Pharmaceutica
Assuming the 90 days trading horizon Meyer Burger Tech is expected to under-perform the Basilea Pharmaceutica. In addition to that, Meyer Burger is 14.32 times more volatile than Basilea Pharmaceutica AG. It trades about -0.27 of its total potential returns per unit of risk. Basilea Pharmaceutica AG is currently generating about -0.27 per unit of volatility. If you would invest 4,420 in Basilea Pharmaceutica AG on August 25, 2024 and sell it today you would lose (290.00) from holding Basilea Pharmaceutica AG or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meyer Burger Tech vs. Basilea Pharmaceutica AG
Performance |
| Timeline |
| Meyer Burger Tech |
| Basilea Pharmaceutica |
Meyer Burger and Basilea Pharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meyer Burger and Basilea Pharmaceutica
The main advantage of trading using opposite Meyer Burger and Basilea Pharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meyer Burger position performs unexpectedly, Basilea Pharmaceutica 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 Basilea Pharmaceutica will offset losses from the drop in Basilea Pharmaceutica's long position.| Meyer Burger vs. Santhera Pharmaceuticals Holding | Meyer Burger vs. Newron Pharmaceuticals SpA | Meyer Burger vs. Basilea Pharmaceutica AG | Meyer Burger vs. Evolva Holding SA |
| Basilea Pharmaceutica vs. Santhera Pharmaceuticals Holding | Basilea Pharmaceutica vs. Evolva Holding SA | Basilea Pharmaceutica vs. COSMO Pharmaceuticals SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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