Correlation Between PCI Biotech and Nykode Therapeutics
Can any of the company-specific risk be diversified away by investing in both PCI Biotech and Nykode Therapeutics 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 PCI Biotech and Nykode Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCI Biotech Holding and Nykode Therapeutics ASA, you can compare the effects of market volatilities on PCI Biotech and Nykode Therapeutics 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 PCI Biotech with a short position of Nykode Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCI Biotech and Nykode Therapeutics.
Diversification Opportunities for PCI Biotech and Nykode Therapeutics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PCI and Nykode is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PCI Biotech Holding and Nykode Therapeutics ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykode Therapeutics ASA and PCI Biotech 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 PCI Biotech Holding are associated (or correlated) with Nykode Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykode Therapeutics ASA has no effect on the direction of PCI Biotech i.e., PCI Biotech and Nykode Therapeutics go up and down completely randomly.
Pair Corralation between PCI Biotech and Nykode Therapeutics
Assuming the 90 days trading horizon PCI Biotech Holding is expected to generate 1.02 times more return on investment than Nykode Therapeutics. However, PCI Biotech is 1.02 times more volatile than Nykode Therapeutics ASA. It trades about -0.04 of its potential returns per unit of risk. Nykode Therapeutics ASA is currently generating about -0.09 per unit of risk. If you would invest 182.00 in PCI Biotech Holding on November 2, 2024 and sell it today you would lose (60.00) from holding PCI Biotech Holding or give up 32.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
PCI Biotech Holding vs. Nykode Therapeutics ASA
Performance |
| Timeline |
| PCI Biotech Holding |
| Nykode Therapeutics ASA |
PCI Biotech and Nykode Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCI Biotech and Nykode Therapeutics
The main advantage of trading using opposite PCI Biotech and Nykode Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCI Biotech position performs unexpectedly, Nykode Therapeutics 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 Nykode Therapeutics will offset losses from the drop in Nykode Therapeutics' long position.| PCI Biotech vs. Jaeren Sparebank | PCI Biotech vs. Kraft Bank Asa | PCI Biotech vs. Napatech AS | PCI Biotech vs. Sparebank 1 SMN |
| Nykode Therapeutics vs. Equinor ASA | Nykode Therapeutics vs. DnB ASA | Nykode Therapeutics vs. Aker BP ASA | Nykode Therapeutics vs. Telenor ASA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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