Correlation Between BB Biotech and IShares SP
Can any of the company-specific risk be diversified away by investing in both BB Biotech and IShares SP 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 IShares SP 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 iShares SP 500, you can compare the effects of market volatilities on BB Biotech and IShares SP 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 IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and IShares SP.
Diversification Opportunities for BB Biotech and IShares SP
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BION and IShares is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 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 IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of BB Biotech i.e., BB Biotech and IShares SP go up and down completely randomly.
Pair Corralation between BB Biotech and IShares SP
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the IShares SP. In addition to that, BB Biotech is 2.12 times more volatile than iShares SP 500. It trades about -0.04 of its total potential returns per unit of risk. iShares SP 500 is currently generating about 0.21 per unit of volatility. If you would invest 5,581 in iShares SP 500 on September 14, 2024 and sell it today you would earn a total of 467.00 from holding iShares SP 500 or generate 8.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BB Biotech AG vs. iShares SP 500
Performance |
Timeline |
BB Biotech AG |
iShares SP 500 |
BB Biotech and IShares SP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BB Biotech and IShares SP
The main advantage of trading using opposite BB Biotech and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP'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 |
IShares SP vs. Baloise Holding AG | IShares SP vs. 21Shares Polkadot ETP | IShares SP vs. UBS ETF MSCI | IShares SP vs. BB Biotech AG |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |