Correlation Between Probi AB and Stayble Therapeutics
Can any of the company-specific risk be diversified away by investing in both Probi AB and Stayble 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 Probi AB and Stayble Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Probi AB and Stayble Therapeutics AB, you can compare the effects of market volatilities on Probi AB and Stayble 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 Probi AB with a short position of Stayble Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Probi AB and Stayble Therapeutics.
Diversification Opportunities for Probi AB and Stayble Therapeutics
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Probi and Stayble is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Probi AB and Stayble Therapeutics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stayble Therapeutics 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 Stayble Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stayble Therapeutics has no effect on the direction of Probi AB i.e., Probi AB and Stayble Therapeutics go up and down completely randomly.
Pair Corralation between Probi AB and Stayble Therapeutics
Assuming the 90 days trading horizon Probi AB is expected to generate 1.88 times less return on investment than Stayble Therapeutics. But when comparing it to its historical volatility, Probi AB is 1.48 times less risky than Stayble Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Stayble Therapeutics AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Stayble Therapeutics AB on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Stayble Therapeutics AB or generate 128.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Probi AB vs. Stayble Therapeutics AB
Performance |
| Timeline |
| Probi AB |
| Stayble Therapeutics |
Probi AB and Stayble Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Probi AB and Stayble Therapeutics
The main advantage of trading using opposite Probi AB and Stayble Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Probi AB position performs unexpectedly, Stayble 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 Stayble Therapeutics will offset losses from the drop in Stayble Therapeutics' long position.The idea behind Probi AB and Stayble Therapeutics 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.| Stayble Therapeutics vs. Hansa Biopharma AB | Stayble Therapeutics vs. Saniona AB | Stayble Therapeutics vs. Oncopeptides AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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