Correlation Between BioArctic and Genovis AB

Can any of the company-specific risk be diversified away by investing in both BioArctic and Genovis AB 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 BioArctic and Genovis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BioArctic AB and Genovis AB, you can compare the effects of market volatilities on BioArctic and Genovis AB 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 BioArctic with a short position of Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioArctic and Genovis AB.

Diversification Opportunities for BioArctic and Genovis AB

0.41

Correlation Coefficient

BioArctic  Genovis AB

Very weak diversification

The 3 months correlation between BioArctic and Genovis is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BioArctic AB and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB and BioArctic 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 BioArctic AB are associated (or correlated) with Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of BioArctic i.e., BioArctic and Genovis AB go up and down completely randomly.

Pair Corralation between BioArctic and Genovis AB

Assuming the 90 days trading horizon BioArctic AB is expected to generate 1.02 times more return on investment than Genovis AB. However, BioArctic is 1.02 times more volatile than Genovis AB. It trades about 0.01 of its potential returns per unit of risk. Genovis AB is currently generating about -0.02 per unit of risk. If you would invest  27,760  in BioArctic AB on October 9, 2024 and sell it today you would lose (6,560) from holding BioArctic AB or give up 23.63% of portfolio value over 90 days.

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

BioArctic AB  vs.  Genovis AB

BioArctic AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioArctic AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, BioArctic sustained solid returns over the last few months and may actually be approaching a breakup point.

Genovis AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genovis AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Genovis AB 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 BioArctic and Genovis AB

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

The idea behind BioArctic AB and Genovis 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.