Correlation Between Probi AB and Hansa Biopharma
Can any of the company-specific risk be diversified away by investing in both Probi AB and Hansa Biopharma 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 Probi AB and Hansa Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Probi AB and Hansa Biopharma AB, you can compare the effects of market volatilities on Probi AB and Hansa Biopharma 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 Probi AB with a short position of Hansa Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Probi AB and Hansa Biopharma.
Diversification Opportunities for Probi AB and Hansa Biopharma
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Probi and Hansa is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Probi AB and Hansa Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Biopharma AB and Probi AB 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 Probi AB are associated (or correlated) with Hansa Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Biopharma AB has no effect on the direction of Probi AB i.e., Probi AB and Hansa Biopharma go up and down completely randomly.
Pair Corralation between Probi AB and Hansa Biopharma
Assuming the 90 days trading horizon Probi AB is expected to generate 1.24 times more return on investment than Hansa Biopharma. However, Probi AB is 1.24 times more volatile than Hansa Biopharma AB. It trades about 0.07 of its potential returns per unit of risk. Hansa Biopharma AB is currently generating about -0.08 per unit of risk. If you would invest 27,600 in Probi AB on November 2, 2024 and sell it today you would earn a total of 6,900 from holding Probi AB or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.03% |
| Values | Daily Returns |
Probi AB vs. Hansa Biopharma AB
Performance |
| Timeline |
| Probi AB |
| Hansa Biopharma AB |
Probi AB and Hansa Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Probi AB and Hansa Biopharma
The main advantage of trading using opposite Probi AB and Hansa Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Probi AB position performs unexpectedly, Hansa Biopharma 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 Hansa Biopharma will offset losses from the drop in Hansa Biopharma's long position.The idea behind Probi AB and Hansa Biopharma AB 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.| Hansa Biopharma vs. Oncopeptides AB | Hansa Biopharma vs. ExpreS2ion Biotech Holding | Hansa Biopharma vs. BioInvent International AB | Hansa Biopharma vs. Zealand Pharma AS |
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 Stocks Directory module to find actively traded stocks across global markets.
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