Correlation Between Lion Biotechnologies and Jenoptik

Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and Jenoptik 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 Lion Biotechnologies and Jenoptik into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lion Biotechnologies and Jenoptik AG, you can compare the effects of market volatilities on Lion Biotechnologies and Jenoptik 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 Lion Biotechnologies with a short position of Jenoptik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and Jenoptik.

Diversification Opportunities for Lion Biotechnologies and Jenoptik

-0.28

Correlation Coefficient

Lion Biotechnologies  Jenoptik

Very good diversification

The 3 months correlation between Lion and Jenoptik is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and Jenoptik AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jenoptik AG and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with Jenoptik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jenoptik AG has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and Jenoptik go up and down completely randomly.

Pair Corralation between Lion Biotechnologies and Jenoptik

Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the Jenoptik. In addition to that, Lion Biotechnologies is 1.66 times more volatile than Jenoptik AG. It trades about -0.25 of its total potential returns per unit of risk. Jenoptik AG is currently generating about -0.06 per unit of volatility. If you would invest  2,244  in Jenoptik AG on December 30, 2024 and sell it today you would lose (271.00) from holding Jenoptik AG or give up 12.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lion Biotechnologies  vs.  Jenoptik AG

Lion Biotechnologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jenoptik AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jenoptik AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Lion Biotechnologies and Jenoptik

The main advantage of trading using opposite Lion Biotechnologies and Jenoptik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, Jenoptik 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 Jenoptik will offset losses from the drop in Jenoptik's long position.

The idea behind Lion Biotechnologies and Jenoptik AG 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.