Correlation Between Bavarian Nordic and Sydinvest Korte

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

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

Diversification Opportunities for Bavarian Nordic and Sydinvest Korte

-0.01

Correlation Coefficient

Bavarian Nordic  Sydinvest Korte

Good diversification

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

Pair Corralation between Bavarian Nordic and Sydinvest Korte

Assuming the 90 days trading horizon Bavarian Nordic is expected to under-perform the Sydinvest Korte. In addition to that, Bavarian Nordic is 5.65 times more volatile than Sydinvest Korte Obligationer. It trades about -0.03 of its total potential returns per unit of risk. Sydinvest Korte Obligationer is currently generating about 0.03 per unit of volatility. If you would invest  9,748  in Sydinvest Korte Obligationer on October 8, 2024 and sell it today you would earn a total of  102.00  from holding Sydinvest Korte Obligationer or generate 1.05% return on investment over 90 days.

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

Bavarian Nordic  vs.  Sydinvest Korte Obligationer

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 very healthy basic indicators, Bavarian Nordic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sydinvest Korte Obli

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sydinvest Korte Obligationer are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sydinvest Korte is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bavarian Nordic and Sydinvest Korte

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

The idea behind Bavarian Nordic and Sydinvest Korte Obligationer 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..