Correlation Between China SXT and Biofrontera
Can any of the company-specific risk be diversified away by investing in both China SXT and Biofrontera 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 China SXT and Biofrontera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China SXT Pharmaceuticals and Biofrontera, you can compare the effects of market volatilities on China SXT and Biofrontera 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 China SXT with a short position of Biofrontera. Check out your portfolio center. Please also check ongoing floating volatility patterns of China SXT and Biofrontera.
Diversification Opportunities for China SXT and Biofrontera
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Biofrontera is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China SXT Pharmaceuticals and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and China SXT 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 China SXT Pharmaceuticals are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of China SXT i.e., China SXT and Biofrontera go up and down completely randomly.
Pair Corralation between China SXT and Biofrontera
Given the investment horizon of 90 days China SXT Pharmaceuticals is expected to under-perform the Biofrontera. In addition to that, China SXT is 1.16 times more volatile than Biofrontera. It trades about -0.05 of its total potential returns per unit of risk. Biofrontera is currently generating about -0.05 per unit of volatility. If you would invest 2,100 in Biofrontera on August 26, 2024 and sell it today you would lose (2,013) from holding Biofrontera or give up 95.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China SXT Pharmaceuticals vs. Biofrontera
Performance |
| Timeline |
| China SXT Pharmaceuticals |
| Biofrontera |
China SXT and Biofrontera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China SXT and Biofrontera
The main advantage of trading using opposite China SXT and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China SXT position performs unexpectedly, Biofrontera 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 Biofrontera will offset losses from the drop in Biofrontera's long position.| China SXT vs. Akanda Corp | China SXT vs. Petros Pharmaceuticals | China SXT vs. GelStat Corp | China SXT vs. Shuttle Pharmaceuticals |
| Biofrontera vs. Shuttle Pharmaceuticals | Biofrontera vs. Akanda Corp | Biofrontera vs. China Pharma Holdings | Biofrontera vs. Sunshine Biopharma Warrant |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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