Correlation Between Acticor Biotech and Biophytis

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

By analyzing existing cross correlation between Acticor Biotech SAS and Biophytis SA, you can compare the effects of market volatilities on Acticor Biotech and Biophytis 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 Acticor Biotech with a short position of Biophytis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acticor Biotech and Biophytis.

Diversification Opportunities for Acticor Biotech and Biophytis

0.07

Correlation Coefficient

Acticor Biotech  Biophytis

Significant diversification

The 3 months correlation between Acticor and Biophytis is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Acticor Biotech SAS and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and Acticor Biotech 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 Acticor Biotech SAS are associated (or correlated) with Biophytis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biophytis SA has no effect on the direction of Acticor Biotech i.e., Acticor Biotech and Biophytis go up and down completely randomly.

Pair Corralation between Acticor Biotech and Biophytis

Assuming the 90 days trading horizon Acticor Biotech SAS is expected to generate 1.6 times more return on investment than Biophytis. However, Acticor Biotech is 1.6 times more volatile than Biophytis SA. It trades about 0.0 of its potential returns per unit of risk. Biophytis SA is currently generating about -0.09 per unit of risk. If you would invest  710.00  in Acticor Biotech SAS on October 9, 2024 and sell it today you would lose (685.00) from holding Acticor Biotech SAS or give up 96.48% of portfolio value over 90 days.

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

Acticor Biotech SAS  vs.  Biophytis SA

Acticor Biotech SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acticor Biotech SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Acticor Biotech is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Biophytis SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biophytis SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Biophytis reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acticor Biotech and Biophytis

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

The idea behind Acticor Biotech SAS and Biophytis SA 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.