Correlation Between Nanobiotix and Biophytis
Can any of the company-specific risk be diversified away by investing in both Nanobiotix and Biophytis 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 Biophytis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanobiotix SA and Biophytis SA, you can compare the effects of market volatilities on Nanobiotix and Biophytis 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 Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanobiotix and Biophytis.
Diversification Opportunities for Nanobiotix and Biophytis
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanobiotix and Biophytis is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nanobiotix SA and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis 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 Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of Nanobiotix i.e., Nanobiotix and Biophytis go up and down completely randomly.
Pair Corralation between Nanobiotix and Biophytis
Assuming the 90 days trading horizon Nanobiotix SA is expected to under-perform the Biophytis. But the stock apears to be less risky and, when comparing its historical volatility, Nanobiotix SA is 1.92 times less risky than Biophytis. The stock trades about -0.52 of its potential returns per unit of risk. The Biophytis SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Biophytis SA on September 1, 2024 and sell it today you would lose (2.00) from holding Biophytis SA or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanobiotix SA vs. Biophytis SA
Performance |
| Timeline |
| Nanobiotix SA |
| Biophytis SA |
Nanobiotix and Biophytis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanobiotix and Biophytis
The main advantage of trading using opposite Nanobiotix and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanobiotix position performs unexpectedly, Biophytis 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 Biophytis will offset losses from the drop in Biophytis' long position.| Nanobiotix vs. Virbac SA | Nanobiotix vs. Bonduelle SCA | Nanobiotix vs. Biomerieux SA | Nanobiotix vs. Guerbet S A |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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