Correlation Between Saniona AB and Active Biotech
Can any of the company-specific risk be diversified away by investing in both Saniona AB and Active Biotech 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 Saniona AB and Active Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saniona AB and Active Biotech AB, you can compare the effects of market volatilities on Saniona AB and Active Biotech 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 Saniona AB with a short position of Active Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saniona AB and Active Biotech.
Diversification Opportunities for Saniona AB and Active Biotech
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saniona and Active is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Saniona AB and Active Biotech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Biotech AB and Saniona 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 Saniona AB are associated (or correlated) with Active Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Biotech AB has no effect on the direction of Saniona AB i.e., Saniona AB and Active Biotech go up and down completely randomly.
Pair Corralation between Saniona AB and Active Biotech
Assuming the 90 days trading horizon Saniona AB is expected to generate 0.61 times more return on investment than Active Biotech. However, Saniona AB is 1.63 times less risky than Active Biotech. It trades about 0.03 of its potential returns per unit of risk. Active Biotech AB is currently generating about 0.01 per unit of risk. If you would invest 315.00 in Saniona AB on August 29, 2024 and sell it today you would lose (5.00) from holding Saniona AB or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saniona AB vs. Active Biotech AB
Performance |
| Timeline |
| Saniona AB |
| Active Biotech AB |
Saniona AB and Active Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saniona AB and Active Biotech
The main advantage of trading using opposite Saniona AB and Active Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saniona AB position performs unexpectedly, Active Biotech 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 Active Biotech will offset losses from the drop in Active Biotech's long position.| Saniona AB vs. GomSpace Group AB | Saniona AB vs. Hansa Biopharma AB | Saniona AB vs. Zealand Pharma AS | Saniona AB vs. BioInvent International AB |
| Active Biotech vs. BioInvent International AB | Active Biotech vs. Orexo AB | Active Biotech vs. Alligator Bioscience AB | Active Biotech vs. Swedish Orphan Biovitrum |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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