Correlation Between Serstech and Xbrane Biopharma
Can any of the company-specific risk be diversified away by investing in both Serstech and Xbrane 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 Serstech and Xbrane Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Serstech AB and Xbrane Biopharma AB, you can compare the effects of market volatilities on Serstech and Xbrane 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 Serstech with a short position of Xbrane Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serstech and Xbrane Biopharma.
Diversification Opportunities for Serstech and Xbrane Biopharma
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Serstech and Xbrane is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Serstech AB and Xbrane Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xbrane Biopharma and Serstech 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 Serstech AB are associated (or correlated) with Xbrane Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xbrane Biopharma has no effect on the direction of Serstech i.e., Serstech and Xbrane Biopharma go up and down completely randomly.
Pair Corralation between Serstech and Xbrane Biopharma
Assuming the 90 days trading horizon Serstech AB is expected to generate 0.29 times more return on investment than Xbrane Biopharma. However, Serstech AB is 3.5 times less risky than Xbrane Biopharma. It trades about 0.07 of its potential returns per unit of risk. Xbrane Biopharma AB is currently generating about -0.02 per unit of risk. If you would invest 59.00 in Serstech AB on August 26, 2024 and sell it today you would earn a total of 66.00 from holding Serstech AB or generate 111.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Serstech AB vs. Xbrane Biopharma AB
Performance |
| Timeline |
| Serstech AB |
| Xbrane Biopharma |
Serstech and Xbrane Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Serstech and Xbrane Biopharma
The main advantage of trading using opposite Serstech and Xbrane Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serstech position performs unexpectedly, Xbrane 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 Xbrane Biopharma will offset losses from the drop in Xbrane Biopharma's long position.| Serstech vs. Novotek AB | Serstech vs. Addnode Group AB | Serstech vs. Softronic AB | Serstech vs. CTT Systems AB |
| Xbrane Biopharma vs. Hansa Biopharma AB | Xbrane Biopharma vs. Vicore Pharma Holding | Xbrane Biopharma vs. XSpray Pharma AB | Xbrane Biopharma vs. Saniona 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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