Correlation Between Sequana Medical and Biotalys
Can any of the company-specific risk be diversified away by investing in both Sequana Medical and Biotalys 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 Sequana Medical and Biotalys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sequana Medical NV and Biotalys NV, you can compare the effects of market volatilities on Sequana Medical and Biotalys 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 Sequana Medical with a short position of Biotalys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequana Medical and Biotalys.
Diversification Opportunities for Sequana Medical and Biotalys
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sequana and Biotalys is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sequana Medical NV and Biotalys NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotalys NV and Sequana Medical 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 Sequana Medical NV are associated (or correlated) with Biotalys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotalys NV has no effect on the direction of Sequana Medical i.e., Sequana Medical and Biotalys go up and down completely randomly.
Pair Corralation between Sequana Medical and Biotalys
Assuming the 90 days trading horizon Sequana Medical NV is expected to under-perform the Biotalys. In addition to that, Sequana Medical is 3.67 times more volatile than Biotalys NV. It trades about -0.09 of its total potential returns per unit of risk. Biotalys NV is currently generating about 0.02 per unit of volatility. If you would invest 302.00 in Biotalys NV on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Biotalys NV or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sequana Medical NV vs. Biotalys NV
Performance |
| Timeline |
| Sequana Medical NV |
| Biotalys NV |
Sequana Medical and Biotalys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sequana Medical and Biotalys
The main advantage of trading using opposite Sequana Medical and Biotalys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequana Medical position performs unexpectedly, Biotalys 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 Biotalys will offset losses from the drop in Biotalys' long position.The idea behind Sequana Medical NV and Biotalys NV 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.| Biotalys vs. Tessenderlo | Biotalys vs. Exmar NV | Biotalys vs. Iep Invest | Biotalys vs. Unifiedpost Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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