Correlation Between BioInvent International and Boule Diagnostics

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

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

Diversification Opportunities for BioInvent International and Boule Diagnostics

-0.59

Correlation Coefficient

BioInvent International  Boule Diagnostics

Excellent diversification

The 3 months correlation between BioInvent and Boule is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Boule Diagnostics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boule Diagnostics and BioInvent International 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 BioInvent International AB are associated (or correlated) with Boule Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boule Diagnostics has no effect on the direction of BioInvent International i.e., BioInvent International and Boule Diagnostics go up and down completely randomly.

Pair Corralation between BioInvent International and Boule Diagnostics

Assuming the 90 days trading horizon BioInvent International AB is expected to generate 1.05 times more return on investment than Boule Diagnostics. However, BioInvent International is 1.05 times more volatile than Boule Diagnostics AB. It trades about 0.12 of its potential returns per unit of risk. Boule Diagnostics AB is currently generating about -0.02 per unit of risk. If you would invest  1,702  in BioInvent International AB on October 7, 2024 and sell it today you would earn a total of  2,448  from holding BioInvent International AB or generate 143.83% return on investment over 90 days.

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

BioInvent International AB  vs.  Boule Diagnostics AB

BioInvent International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioInvent International AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BioInvent International is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Boule Diagnostics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boule Diagnostics AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boule Diagnostics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BioInvent International and Boule Diagnostics

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

The idea behind BioInvent International AB and Boule Diagnostics AB 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.