Correlation Between BB Biotech and Invesco EQQQ
Can any of the company-specific risk be diversified away by investing in both BB Biotech and Invesco EQQQ 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 Invesco EQQQ 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 Invesco EQQQ NASDAQ 100, you can compare the effects of market volatilities on BB Biotech and Invesco EQQQ 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 Invesco EQQQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Invesco EQQQ.
Diversification Opportunities for BB Biotech and Invesco EQQQ
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BION and Invesco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and Invesco EQQQ NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EQQQ NASDAQ 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 Invesco EQQQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EQQQ NASDAQ has no effect on the direction of BB Biotech i.e., BB Biotech and Invesco EQQQ go up and down completely randomly.
Pair Corralation between BB Biotech and Invesco EQQQ
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 1.07 times more return on investment than Invesco EQQQ. However, BB Biotech is 1.07 times more volatile than Invesco EQQQ NASDAQ 100. It trades about -0.06 of its potential returns per unit of risk. Invesco EQQQ NASDAQ 100 is currently generating about -0.1 per unit of risk. If you would invest 3,356 in BB Biotech AG on December 29, 2024 and sell it today you would lose (201.00) from holding BB Biotech AG or give up 5.99% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.41% |
Values | Daily Returns |
BB Biotech AG vs. Invesco EQQQ NASDAQ 100
Performance |
Timeline |
BB Biotech AG |
Invesco EQQQ NASDAQ |
BB Biotech and Invesco EQQQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BB Biotech and Invesco EQQQ
The main advantage of trading using opposite BB Biotech and Invesco EQQQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, Invesco EQQQ 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 Invesco EQQQ will offset losses from the drop in Invesco EQQQ'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 |
Invesco EQQQ vs. UBSFund Solutions MSCI | Invesco EQQQ vs. iShares Core SP | Invesco EQQQ vs. iShares Core MSCI | Invesco EQQQ vs. iShares SP 500 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Stocks Directory Find actively traded stocks across global markets |