Correlation Between OSE Pharma and Biomerieux
Can any of the company-specific risk be diversified away by investing in both OSE Pharma and Biomerieux 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 OSE Pharma and Biomerieux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSE Pharma SA and Biomerieux SA, you can compare the effects of market volatilities on OSE Pharma and Biomerieux 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 OSE Pharma with a short position of Biomerieux. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSE Pharma and Biomerieux.
Diversification Opportunities for OSE Pharma and Biomerieux
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OSE and Biomerieux is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding OSE Pharma SA and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux SA and OSE Pharma 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 OSE Pharma SA are associated (or correlated) with Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of OSE Pharma i.e., OSE Pharma and Biomerieux go up and down completely randomly.
Pair Corralation between OSE Pharma and Biomerieux
Assuming the 90 days trading horizon OSE Pharma SA is expected to generate 4.12 times more return on investment than Biomerieux. However, OSE Pharma is 4.12 times more volatile than Biomerieux SA. It trades about 0.06 of its potential returns per unit of risk. Biomerieux SA is currently generating about 0.02 per unit of risk. If you would invest 374.00 in OSE Pharma SA on August 27, 2024 and sell it today you would earn a total of 515.00 from holding OSE Pharma SA or generate 137.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OSE Pharma SA vs. Biomerieux SA
Performance |
| Timeline |
| OSE Pharma SA |
| Biomerieux SA |
OSE Pharma and Biomerieux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OSE Pharma and Biomerieux
The main advantage of trading using opposite OSE Pharma and Biomerieux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSE Pharma position performs unexpectedly, Biomerieux 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 Biomerieux will offset losses from the drop in Biomerieux's long position.| OSE Pharma vs. Biomerieux SA | OSE Pharma vs. Eurofins Scientific SE | OSE Pharma vs. Sartorius Stedim Biotech | OSE Pharma vs. SEB SA |
| Biomerieux vs. Sartorius Stedim Biotech | Biomerieux vs. Eurofins Scientific SE | Biomerieux vs. Ipsen SA | Biomerieux vs. Edenred 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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