Correlation Between BioInvent International and Hansa Biopharma

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

Diversification Opportunities for BioInvent International and Hansa Biopharma

0.49

Correlation Coefficient

BioInvent International  Hansa Biopharma

Very weak diversification

The 3 months correlation between BioInvent and Hansa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Hansa Biopharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Biopharma 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 Hansa Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Biopharma AB has no effect on the direction of BioInvent International i.e., BioInvent International and Hansa Biopharma go up and down completely randomly.

Pair Corralation between BioInvent International and Hansa Biopharma

Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Hansa Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, BioInvent International AB is 1.58 times less risky than Hansa Biopharma. The stock trades about -0.3 of its potential returns per unit of risk. The Hansa Biopharma AB is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,250  in Hansa Biopharma AB on November 29, 2024 and sell it today you would lose (736.00) from holding Hansa Biopharma AB or give up 22.65% of portfolio value over 90 days.

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

BioInvent International AB  vs.  Hansa Biopharma 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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hansa Biopharma AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hansa Biopharma 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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BioInvent International and Hansa Biopharma

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

The idea behind BioInvent International AB and Hansa Biopharma 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.