Correlation Between BioInvent International and Dignitana

Can any of the company-specific risk be diversified away by investing in both BioInvent International and Dignitana 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 Dignitana 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 Dignitana AB, you can compare the effects of market volatilities on BioInvent International and Dignitana 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 Dignitana. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Dignitana.

Diversification Opportunities for BioInvent International and Dignitana

-0.32

Correlation Coefficient

BioInvent International  Dignitana

Very good diversification

The 3 months correlation between BioInvent and Dignitana is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Dignitana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dignitana AB 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 Dignitana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dignitana AB has no effect on the direction of BioInvent International i.e., BioInvent International and Dignitana go up and down completely randomly.

Pair Corralation between BioInvent International and Dignitana

Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Dignitana. But the stock apears to be less risky and, when comparing its historical volatility, BioInvent International AB is 2.39 times less risky than Dignitana. The stock trades about -0.23 of its potential returns per unit of risk. The Dignitana AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Dignitana AB on December 4, 2024 and sell it today you would earn a total of  5.00  from holding Dignitana AB or generate 4.9% return on investment over 90 days.

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

BioInvent International AB  vs.  Dignitana AB

BioInvent International

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Dignitana AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dignitana AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Dignitana unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioInvent International and Dignitana

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

The idea behind BioInvent International AB and Dignitana 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.