Correlation Between Kerlink SAS and Biophytis

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

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

Diversification Opportunities for Kerlink SAS and Biophytis

-0.23

Correlation Coefficient

Kerlink SAS  Biophytis

Very good diversification

The 3 months correlation between Kerlink and Biophytis is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kerlink SAS and Biophytis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biophytis SA and Kerlink SAS 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 Kerlink 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 Kerlink SAS i.e., Kerlink SAS and Biophytis go up and down completely randomly.

Pair Corralation between Kerlink SAS and Biophytis

Assuming the 90 days trading horizon Kerlink SAS is expected to generate 440.64 times less return on investment than Biophytis. In addition to that, Kerlink SAS is 1.5 times more volatile than Biophytis SA. It trades about 0.0 of its total potential returns per unit of risk. Biophytis SA is currently generating about 0.4 per unit of volatility. 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 Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kerlink SAS  vs.  Biophytis SA

Kerlink SAS

Risk-Adjusted Performance

2 of 100

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 SA

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Kerlink SAS and Biophytis

The main advantage of trading using opposite Kerlink SAS and Biophytis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerlink SAS 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 Kerlink 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.