Correlation Between Metall Zug and BB Biotech
Can any of the company-specific risk be diversified away by investing in both Metall Zug 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 Metall Zug and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metall Zug AG and BB Biotech AG, you can compare the effects of market volatilities on Metall Zug 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 Metall Zug with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and BB Biotech.
Diversification Opportunities for Metall Zug and BB Biotech
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metall and BION is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG 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 Metall Zug 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 Metall Zug AG 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 Metall Zug i.e., Metall Zug and BB Biotech go up and down completely randomly.
Pair Corralation between Metall Zug and BB Biotech
Assuming the 90 days trading horizon Metall Zug AG is expected to under-perform the BB Biotech. In addition to that, Metall Zug is 1.13 times more volatile than BB Biotech AG. It trades about -0.25 of its total potential returns per unit of risk. BB Biotech AG is currently generating about 0.08 per unit of volatility. If you would invest 3,640 in BB Biotech AG on August 29, 2024 and sell it today you would earn a total of 90.00 from holding BB Biotech AG or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metall Zug AG vs. BB Biotech AG
Performance |
| Timeline |
| Metall Zug AG |
| BB Biotech AG |
Metall Zug and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metall Zug and BB Biotech
The main advantage of trading using opposite Metall Zug and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metall Zug 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.| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Emmi 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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