Correlation Between Zaptec AS and Bavarian Nordic
Can any of the company-specific risk be diversified away by investing in both Zaptec AS and Bavarian Nordic 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 Zaptec AS and Bavarian Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zaptec AS and Bavarian Nordic, you can compare the effects of market volatilities on Zaptec AS and Bavarian Nordic 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 Zaptec AS with a short position of Bavarian Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zaptec AS and Bavarian Nordic.
Diversification Opportunities for Zaptec AS and Bavarian Nordic
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zaptec and Bavarian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Bavarian Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bavarian Nordic and Zaptec AS 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 Zaptec AS are associated (or correlated) with Bavarian Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bavarian Nordic has no effect on the direction of Zaptec AS i.e., Zaptec AS and Bavarian Nordic go up and down completely randomly.
Pair Corralation between Zaptec AS and Bavarian Nordic
Assuming the 90 days trading horizon Zaptec AS is expected to generate 1.45 times more return on investment than Bavarian Nordic. However, Zaptec AS is 1.45 times more volatile than Bavarian Nordic. It trades about 0.32 of its potential returns per unit of risk. Bavarian Nordic is currently generating about -0.15 per unit of risk. If you would invest 1,063 in Zaptec AS on November 9, 2024 and sell it today you would earn a total of 347.00 from holding Zaptec AS or generate 32.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zaptec AS vs. Bavarian Nordic
Performance |
| Timeline |
| Zaptec AS |
| Bavarian Nordic |
Zaptec AS and Bavarian Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zaptec AS and Bavarian Nordic
The main advantage of trading using opposite Zaptec AS and Bavarian Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zaptec AS position performs unexpectedly, Bavarian Nordic 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 Bavarian Nordic will offset losses from the drop in Bavarian Nordic's long position.The idea behind Zaptec AS and Bavarian Nordic 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.| Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. Danske Bank AS | Bavarian Nordic vs. Genmab AS | Bavarian Nordic vs. DSV Panalpina AS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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