Correlation Between Biofrontera and Qilian International

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

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

Diversification Opportunities for Biofrontera and Qilian International

-0.54

Correlation Coefficient

Biofrontera  Qilian International

Excellent diversification

The 3 months correlation between Biofrontera and Qilian is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera and Qilian International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilian International and Biofrontera 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 Biofrontera are associated (or correlated) with Qilian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilian International has no effect on the direction of Biofrontera i.e., Biofrontera and Qilian International go up and down completely randomly.

Pair Corralation between Biofrontera and Qilian International

If you would invest  82.00  in Biofrontera on September 13, 2024 and sell it today you would earn a total of  23.00  from holding Biofrontera or generate 28.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.33%
Values	Daily Returns

Biofrontera  vs.  Qilian International Holding

Biofrontera

Risk-Adjusted Performance

0 of 100

Weak

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

Qilian International

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Qilian International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak essential indicators, Qilian International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biofrontera and Qilian International

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

The idea behind Biofrontera and Qilian International Holding 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.