Correlation Between Bavarian Nordic and Brd Klee

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

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

Diversification Opportunities for Bavarian Nordic and Brd Klee

0.01

Correlation Coefficient

Bavarian Nordic  Brd Klee

Significant diversification

The 3 months correlation between Bavarian and Brd is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic and Brd Klee AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brd Klee AS 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 Brd Klee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brd Klee AS has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Brd Klee go up and down completely randomly.

Pair Corralation between Bavarian Nordic and Brd Klee

Assuming the 90 days trading horizon Bavarian Nordic is expected to generate 1.37 times more return on investment than Brd Klee. However, Bavarian Nordic is 1.37 times more volatile than Brd Klee AS. It trades about 0.02 of its potential returns per unit of risk. Brd Klee AS is currently generating about 0.0 per unit of risk. If you would invest  19,400  in Bavarian Nordic on October 22, 2024 and sell it today you would earn a total of  235.00  from holding Bavarian Nordic or generate 1.21% return on investment over 90 days.

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

Bavarian Nordic  vs.  Brd Klee AS

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Brd Klee AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brd Klee AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Bavarian Nordic and Brd Klee

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

The idea behind Bavarian Nordic and Brd Klee 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.