Correlation Between BioInvent International and Xvivo Perfusion

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

Diversification Opportunities for BioInvent International and Xvivo Perfusion

-0.31

Correlation Coefficient

BioInvent International  Xvivo Perfusion

Very good diversification

The 3 months correlation between BioInvent and Xvivo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion 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 Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of BioInvent International i.e., BioInvent International and Xvivo Perfusion go up and down completely randomly.

Pair Corralation between BioInvent International and Xvivo Perfusion

Assuming the 90 days trading horizon BioInvent International AB is expected to under-perform the Xvivo Perfusion. In addition to that, BioInvent International is 1.55 times more volatile than Xvivo Perfusion AB. It trades about -0.17 of its total potential returns per unit of risk. Xvivo Perfusion AB is currently generating about -0.01 per unit of volatility. If you would invest  50,100  in Xvivo Perfusion AB on October 13, 2024 and sell it today you would lose (1,100) from holding Xvivo Perfusion AB or give up 2.2% of portfolio value over 90 days.

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

BioInvent International AB  vs.  Xvivo Perfusion AB

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

Xvivo Perfusion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xvivo Perfusion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Xvivo Perfusion 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 Xvivo Perfusion

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

The idea behind BioInvent International AB and Xvivo Perfusion 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.