Correlation Between ABVC Biopharma and Nutriband

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Can any of the company-specific risk be diversified away by investing in both ABVC Biopharma and Nutriband 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 ABVC Biopharma and Nutriband into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABVC Biopharma and Nutriband, you can compare the effects of market volatilities on ABVC Biopharma and Nutriband 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 ABVC Biopharma with a short position of Nutriband. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABVC Biopharma and Nutriband.

Diversification Opportunities for ABVC Biopharma and Nutriband

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between ABVC and Nutriband is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ABVC Biopharma and Nutriband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutriband and ABVC Biopharma 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 ABVC Biopharma are associated (or correlated) with Nutriband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutriband has no effect on the direction of ABVC Biopharma i.e., ABVC Biopharma and Nutriband go up and down completely randomly.

Pair Corralation between ABVC Biopharma and Nutriband

Given the investment horizon of 90 days ABVC Biopharma is expected to generate 1.69 times less return on investment than Nutriband. But when comparing it to its historical volatility, ABVC Biopharma is 1.6 times less risky than Nutriband. It trades about 0.11 of its potential returns per unit of risk. Nutriband is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  418.00  in Nutriband on December 28, 2024 and sell it today you would earn a total of  239.00  from holding Nutriband or generate 57.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ABVC Biopharma  vs.  Nutriband

 Performance 
       Timeline  
ABVC Biopharma 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ABVC Biopharma are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ABVC Biopharma exhibited solid returns over the last few months and may actually be approaching a breakup point.
Nutriband 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nutriband are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nutriband sustained solid returns over the last few months and may actually be approaching a breakup point.

ABVC Biopharma and Nutriband Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ABVC Biopharma and Nutriband

The main advantage of trading using opposite ABVC Biopharma and Nutriband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABVC Biopharma position performs unexpectedly, Nutriband 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 Nutriband will offset losses from the drop in Nutriband's long position.
The idea behind ABVC Biopharma and Nutriband 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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