Correlation Between BB Biotech and Mobilezone

Can any of the company-specific risk be diversified away by investing in both BB Biotech and Mobilezone 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 Mobilezone 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 mobilezone ag, you can compare the effects of market volatilities on BB Biotech and Mobilezone 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 Mobilezone. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and Mobilezone.

Diversification Opportunities for BB Biotech and Mobilezone

-0.51

Correlation Coefficient

BB Biotech  Mobilezone

Excellent diversification

The 3 months correlation between BION and Mobilezone is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and mobilezone ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone ag 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 Mobilezone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone ag has no effect on the direction of BB Biotech i.e., BB Biotech and Mobilezone go up and down completely randomly.

Pair Corralation between BB Biotech and Mobilezone

Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the Mobilezone. But the stock apears to be less risky and, when comparing its historical volatility, BB Biotech AG is 1.08 times less risky than Mobilezone. The stock trades about -0.11 of its potential returns per unit of risk. The mobilezone ag is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,078  in mobilezone ag on December 31, 2024 and sell it today you would earn a total of  216.00  from holding mobilezone ag or generate 20.04% return on investment over 90 days.

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

BB Biotech AG  vs.  mobilezone ag

BB Biotech AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days BB Biotech AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

mobilezone ag

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in mobilezone ag are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mobilezone showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BB Biotech and Mobilezone

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

The idea behind BB Biotech AG and mobilezone ag 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 Global Correlations module to find global opportunities by holding instruments from different markets.