Correlation Between BB Biotech and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both BB Biotech and 21Shares Polkadot 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 BB Biotech and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Biotech AG and 21Shares Polkadot ETP, you can compare the effects of market volatilities on BB Biotech and 21Shares Polkadot 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 BB Biotech with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and 21Shares Polkadot.
Diversification Opportunities for BB Biotech and 21Shares Polkadot
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BION and 21Shares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and 21Shares Polkadot ETP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Polkadot ETP and BB Biotech 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 BB Biotech AG are associated (or correlated) with 21Shares Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Polkadot ETP has no effect on the direction of BB Biotech i.e., BB Biotech and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between BB Biotech and 21Shares Polkadot
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 0.17 times more return on investment than 21Shares Polkadot. However, BB Biotech AG is 5.9 times less risky than 21Shares Polkadot. It trades about -0.01 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about -0.11 per unit of risk. If you would invest 3,755 in BB Biotech AG on December 2, 2024 and sell it today you would lose (55.00) from holding BB Biotech AG or give up 1.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BB Biotech AG vs. 21Shares Polkadot ETP
Performance |
Timeline |
BB Biotech AG |
21Shares Polkadot ETP |
BB Biotech and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BB Biotech and 21Shares Polkadot
The main advantage of trading using opposite BB Biotech and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, 21Shares Polkadot 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 21Shares Polkadot will offset losses from the drop in 21Shares Polkadot's long position.BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
21Shares Polkadot vs. 21Shares Polygon ETP | 21Shares Polkadot vs. 21Shares Ethereum Core | 21Shares Polkadot vs. 21Shares Tezos staking | 21Shares Polkadot vs. 21Shares Bitcoin ETP |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |