Correlation Between Biofrontera Warrants and Biofrontera

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

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

Diversification Opportunities for Biofrontera Warrants and Biofrontera

-0.26

Correlation Coefficient

Biofrontera Warrants  Biofrontera

Very good diversification

The 3 months correlation between Biofrontera and Biofrontera is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera Warrants and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Biofrontera Warrants 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 Warrants are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of Biofrontera Warrants i.e., Biofrontera Warrants and Biofrontera go up and down completely randomly.

Pair Corralation between Biofrontera Warrants and Biofrontera

Assuming the 90 days horizon Biofrontera Warrants is expected to generate 17.86 times more return on investment than Biofrontera. However, Biofrontera Warrants is 17.86 times more volatile than Biofrontera. It trades about 0.21 of its potential returns per unit of risk. Biofrontera is currently generating about 0.01 per unit of risk. If you would invest  0.00  in Biofrontera Warrants on September 3, 2024 and sell it today you would earn a total of  8.25  from holding Biofrontera Warrants or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.56%
Values	Daily Returns

Biofrontera Warrants  vs.  Biofrontera

Biofrontera Warrants

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera Warrants are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Biofrontera Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Biofrontera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biofrontera has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, Biofrontera may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Biofrontera Warrants and Biofrontera

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

The idea behind Biofrontera Warrants and Biofrontera 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.