Correlation Between NYSE Composite and Biofrontera
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Biofrontera 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 NYSE Composite and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Biofrontera, you can compare the effects of market volatilities on NYSE Composite and Biofrontera 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 NYSE Composite with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Biofrontera.
Diversification Opportunities for NYSE Composite and Biofrontera
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Biofrontera is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and NYSE Composite 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 NYSE Composite are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of NYSE Composite i.e., NYSE Composite and Biofrontera go up and down completely randomly.
Pair Corralation between NYSE Composite and Biofrontera
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.39 times less return on investment than Biofrontera. But when comparing it to its historical volatility, NYSE Composite is 16.59 times less risky than Biofrontera. It trades about 0.24 of its potential returns per unit of risk. Biofrontera is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Biofrontera on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Biofrontera or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Biofrontera
Performance |
| Timeline |
NYSE Composite and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Biofrontera
Pair trading matchups for Biofrontera
Pair Trading with NYSE Composite and Biofrontera
The main advantage of trading using opposite NYSE Composite and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Biofrontera vs. Eliem Therapeutics | Biofrontera vs. HCW Biologics | Biofrontera vs. Scpharmaceuticals | Biofrontera vs. Milestone Pharmaceuticals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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