Correlation Between BioPorto and Ascelia Pharma

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

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

Diversification Opportunities for BioPorto and Ascelia Pharma

-0.1

Correlation Coefficient

BioPorto  Ascelia Pharma

Good diversification

The 3 months correlation between BioPorto and Ascelia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB and BioPorto 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 BioPorto are associated (or correlated) with Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of BioPorto i.e., BioPorto and Ascelia Pharma go up and down completely randomly.

Pair Corralation between BioPorto and Ascelia Pharma

Assuming the 90 days trading horizon BioPorto is expected to under-perform the Ascelia Pharma. But the stock apears to be less risky and, when comparing its historical volatility, BioPorto is 1.29 times less risky than Ascelia Pharma. The stock trades about -0.07 of its potential returns per unit of risk. The Ascelia Pharma AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  297.00  in Ascelia Pharma AB on December 4, 2024 and sell it today you would earn a total of  42.00  from holding Ascelia Pharma AB or generate 14.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

BioPorto  vs.  Ascelia Pharma AB

BioPorto

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioPorto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ascelia Pharma AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascelia Pharma AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Ascelia Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioPorto and Ascelia Pharma

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

The idea behind BioPorto and Ascelia Pharma 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.