Correlation Between Bavarian Nordic and Idogen AB

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

By analyzing existing cross correlation between Bavarian Nordic and Idogen AB, you can compare the effects of market volatilities on Bavarian Nordic and Idogen AB 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 Idogen AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Idogen AB.

Diversification Opportunities for Bavarian Nordic and Idogen AB

0.0

Correlation Coefficient

Bavarian Nordic  Idogen AB

Pay attention - limited upside

The 3 months correlation between Bavarian and Idogen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Idogen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idogen AB 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 Idogen AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idogen AB has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Idogen AB go up and down completely randomly.

Pair Corralation between Bavarian Nordic and Idogen AB

If you would invest  12.00  in Idogen AB on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Idogen AB or generate 0.0% return on investment over 90 days.

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

Bavarian Nordic  vs.  Idogen AB

Bavarian Nordic

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Idogen AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Idogen AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Idogen AB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bavarian Nordic and Idogen AB

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

The idea behind Bavarian Nordic and Idogen AB 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.