Correlation Between BioInvent International and SenzaGen

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

Diversification Opportunities for BioInvent International and SenzaGen

-0.3

Correlation Coefficient

BioInvent International  SenzaGen

Very good diversification

The 3 months correlation between BioInvent and SenzaGen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and SenzaGen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SenzaGen 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 SenzaGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SenzaGen AB has no effect on the direction of BioInvent International i.e., BioInvent International and SenzaGen go up and down completely randomly.

Pair Corralation between BioInvent International and SenzaGen

Assuming the 90 days trading horizon BioInvent International AB is expected to generate 1.41 times more return on investment than SenzaGen. However, BioInvent International is 1.41 times more volatile than SenzaGen AB. It trades about 0.05 of its potential returns per unit of risk. SenzaGen AB is currently generating about 0.0 per unit of risk. If you would invest  4,080  in BioInvent International AB on September 4, 2024 and sell it today you would earn a total of  290.00  from holding BioInvent International AB or generate 7.11% 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.  SenzaGen AB

BioInvent International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioInvent International AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BioInvent International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SenzaGen AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BioInvent International and SenzaGen

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

The idea behind BioInvent International AB and SenzaGen 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.