Correlation Between BioInvent International and Swedish Orphan

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

Diversification Opportunities for BioInvent International and Swedish Orphan

0.19

Correlation Coefficient

BioInvent International  Swedish Orphan

Average diversification

The 3 months correlation between BioInvent and Swedish is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum 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 Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of BioInvent International i.e., BioInvent International and Swedish Orphan go up and down completely randomly.

Pair Corralation between BioInvent International and Swedish Orphan

Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Swedish Orphan. In addition to that, BioInvent International is 1.55 times more volatile than Swedish Orphan Biovitrum. It trades about -0.31 of its total potential returns per unit of risk. Swedish Orphan Biovitrum is currently generating about 0.26 per unit of volatility. If you would invest  29,000  in Swedish Orphan Biovitrum on September 23, 2024 and sell it today you would earn a total of  2,040  from holding Swedish Orphan Biovitrum or generate 7.03% return on investment over 90 days.

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

BioInvent International AB  vs.  Swedish Orphan Biovitrum

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Swedish Orphan Biovitrum

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BioInvent International and Swedish Orphan

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

The idea behind BioInvent International AB and Swedish Orphan Biovitrum 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 CEOs Directory module to screen CEOs from public companies around the world.