Correlation Between Biophytis and Kerlink SAS

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

Diversification Opportunities for Biophytis and Kerlink SAS

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Biophytis and Kerlink is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and Kerlink SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerlink SAS and Biophytis 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 Biophytis SA are associated (or correlated) with Kerlink SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerlink SAS has no effect on the direction of Biophytis i.e., Biophytis and Kerlink SAS go up and down completely randomly.

Pair Corralation between Biophytis and Kerlink SAS

Assuming the 90 days trading horizon Biophytis SA is expected to generate 0.67 times more return on investment than Kerlink SAS. However, Biophytis SA is 1.5 times less risky than Kerlink SAS. It trades about 0.4 of its potential returns per unit of risk. Kerlink SAS is currently generating about 0.0 per unit of risk. If you would invest  30.00  in Biophytis SA on October 3, 2024 and sell it today you would earn a total of  8.00  from holding Biophytis SA or generate 26.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Biophytis SA  vs.  Kerlink SAS

 Performance 
       Timeline  
Biophytis SA 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Kerlink SAS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kerlink SAS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Biophytis and Kerlink SAS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Biophytis and Kerlink SAS

The main advantage of trading using opposite Biophytis and Kerlink SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biophytis position performs unexpectedly, Kerlink SAS 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 Kerlink SAS will offset losses from the drop in Kerlink SAS's long position.
The idea behind Biophytis SA and Kerlink SAS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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