Correlation Between BioInvent International and Infant Bacterial
Can any of the company-specific risk be diversified away by investing in both BioInvent International and Infant Bacterial 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 Infant Bacterial 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 Infant Bacterial Therapeutics, you can compare the effects of market volatilities on BioInvent International and Infant Bacterial 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 Infant Bacterial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Infant Bacterial.
Diversification Opportunities for BioInvent International and Infant Bacterial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioInvent and Infant is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Infant Bacterial Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infant Bacterial 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 Infant Bacterial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infant Bacterial has no effect on the direction of BioInvent International i.e., BioInvent International and Infant Bacterial go up and down completely randomly.
Pair Corralation between BioInvent International and Infant Bacterial
Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Infant Bacterial. But the stock apears to be less risky and, when comparing its historical volatility, BioInvent International AB is 2.67 times less risky than Infant Bacterial. The stock trades about -0.08 of its potential returns per unit of risk. The Infant Bacterial Therapeutics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,820 in Infant Bacterial Therapeutics on September 23, 2024 and sell it today you would earn a total of 2,080 from holding Infant Bacterial Therapeutics or generate 54.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BioInvent International AB vs. Infant Bacterial Therapeutics
Performance |
Timeline |
BioInvent International |
Infant Bacterial |
BioInvent International and Infant Bacterial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BioInvent International and Infant Bacterial
The main advantage of trading using opposite BioInvent International and Infant Bacterial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioInvent International position performs unexpectedly, Infant Bacterial 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 Infant Bacterial will offset losses from the drop in Infant Bacterial's long position.BioInvent International vs. Orexo AB | BioInvent International vs. Alligator Bioscience AB | BioInvent International vs. Swedish Orphan Biovitrum | BioInvent International vs. Anoto Group AB |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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