Correlation Between Virbac SA and Nanobiotix
Can any of the company-specific risk be diversified away by investing in both Virbac SA and Nanobiotix 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 Virbac SA and Nanobiotix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virbac SA and Nanobiotix SA, you can compare the effects of market volatilities on Virbac SA and Nanobiotix 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 Virbac SA with a short position of Nanobiotix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virbac SA and Nanobiotix.
Diversification Opportunities for Virbac SA and Nanobiotix
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virbac and Nanobiotix is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Virbac SA and Nanobiotix SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanobiotix SA and Virbac SA 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 Virbac SA are associated (or correlated) with Nanobiotix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanobiotix SA has no effect on the direction of Virbac SA i.e., Virbac SA and Nanobiotix go up and down completely randomly.
Pair Corralation between Virbac SA and Nanobiotix
Assuming the 90 days trading horizon Virbac SA is expected to generate 0.56 times more return on investment than Nanobiotix. However, Virbac SA is 1.8 times less risky than Nanobiotix. It trades about -0.27 of its potential returns per unit of risk. Nanobiotix SA is currently generating about -0.54 per unit of risk. If you would invest 35,050 in Virbac SA on September 2, 2024 and sell it today you would lose (2,650) from holding Virbac SA or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virbac SA vs. Nanobiotix SA
Performance |
| Timeline |
| Virbac SA |
| Nanobiotix SA |
Virbac SA and Nanobiotix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virbac SA and Nanobiotix
The main advantage of trading using opposite Virbac SA and Nanobiotix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virbac SA position performs unexpectedly, Nanobiotix 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 Nanobiotix will offset losses from the drop in Nanobiotix's long position.| Virbac SA vs. Vetoquinol | Virbac SA vs. Trigano SA | Virbac SA vs. Biomerieux SA | Virbac SA vs. Sartorius Stedim Biotech |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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