Correlation Between Bavarian Nordic and Dataproces Group

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

By analyzing existing cross correlation between Bavarian Nordic and Dataproces Group AS, you can compare the effects of market volatilities on Bavarian Nordic and Dataproces Group 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 Bavarian Nordic with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Dataproces Group.

Diversification Opportunities for Bavarian Nordic and Dataproces Group

-0.62

Correlation Coefficient

Bavarian Nordic  Dataproces Group

Excellent diversification

The 3 months correlation between Bavarian and Dataproces is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and Bavarian Nordic 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 Bavarian Nordic are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Dataproces Group go up and down completely randomly.

Pair Corralation between Bavarian Nordic and Dataproces Group

Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the Dataproces Group. In addition to that, Bavarian Nordic is 1.31 times more volatile than Dataproces Group AS. It trades about -0.09 of its total potential returns per unit of risk. Dataproces Group AS is currently generating about 0.14 per unit of volatility. If you would invest  565.00  in Dataproces Group AS on December 2, 2024 and sell it today you would earn a total of  90.00  from holding Dataproces Group AS or generate 15.93% return on investment over 90 days.

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

Bavarian Nordic  vs.  Dataproces Group AS

Bavarian Nordic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bavarian Nordic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dataproces Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bavarian Nordic and Dataproces Group

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

The idea behind Bavarian Nordic and Dataproces Group AS 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.