Correlation Between Biogen and Corporacin Inmobiliaria

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

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

Diversification Opportunities for Biogen and Corporacin Inmobiliaria

-0.24

Correlation Coefficient

Biogen  Corporacin Inmobiliaria

Very good diversification

The 3 months correlation between Biogen and Corporacin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Corporacin Inmobiliaria Vesta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacin Inmobiliaria and Biogen 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 Biogen Inc are associated (or correlated) with Corporacin Inmobiliaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacin Inmobiliaria has no effect on the direction of Biogen i.e., Biogen and Corporacin Inmobiliaria go up and down completely randomly.

Pair Corralation between Biogen and Corporacin Inmobiliaria

Assuming the 90 days trading horizon Biogen Inc is expected to under-perform the Corporacin Inmobiliaria. In addition to that, Biogen is 1.05 times more volatile than Corporacin Inmobiliaria Vesta. It trades about -0.14 of its total potential returns per unit of risk. Corporacin Inmobiliaria Vesta is currently generating about 0.0 per unit of volatility. If you would invest  4,915  in Corporacin Inmobiliaria Vesta on November 28, 2024 and sell it today you would lose (23.00) from holding Corporacin Inmobiliaria Vesta or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Biogen Inc  vs.  Corporacin Inmobiliaria Vesta

Biogen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Corporacin Inmobiliaria

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporacin Inmobiliaria Vesta has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Corporacin Inmobiliaria is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Biogen and Corporacin Inmobiliaria

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

The idea behind Biogen Inc and Corporacin Inmobiliaria Vesta 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.