Correlation Between Nanobiotix and Abivax SA
Can any of the company-specific risk be diversified away by investing in both Nanobiotix and Abivax SA 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 Nanobiotix and Abivax SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanobiotix SA and Abivax SA, you can compare the effects of market volatilities on Nanobiotix and Abivax SA 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 Nanobiotix with a short position of Abivax SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanobiotix and Abivax SA.
Diversification Opportunities for Nanobiotix and Abivax SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanobiotix and Abivax is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nanobiotix SA and Abivax SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abivax SA and Nanobiotix 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 Nanobiotix SA are associated (or correlated) with Abivax SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abivax SA has no effect on the direction of Nanobiotix i.e., Nanobiotix and Abivax SA go up and down completely randomly.
Pair Corralation between Nanobiotix and Abivax SA
Assuming the 90 days trading horizon Nanobiotix SA is expected to under-perform the Abivax SA. But the stock apears to be less risky and, when comparing its historical volatility, Nanobiotix SA is 1.02 times less risky than Abivax SA. The stock trades about -0.41 of its potential returns per unit of risk. The Abivax SA is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Abivax SA on August 25, 2024 and sell it today you would lose (96.00) from holding Abivax SA or give up 10.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanobiotix SA vs. Abivax SA
Performance |
| Timeline |
| Nanobiotix SA |
| Abivax SA |
Nanobiotix and Abivax SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanobiotix and Abivax SA
The main advantage of trading using opposite Nanobiotix and Abivax SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanobiotix position performs unexpectedly, Abivax SA 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 Abivax SA will offset losses from the drop in Abivax SA's long position.The idea behind Nanobiotix SA and Abivax SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abivax SA vs. Biomerieux SA | Abivax SA vs. Eurofins Scientific SE | Abivax SA vs. Sartorius Stedim Biotech | Abivax SA vs. SEB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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