Correlation Between BioPorto and ViroGates

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

By analyzing existing cross correlation between BioPorto and ViroGates AS, you can compare the effects of market volatilities on BioPorto and ViroGates 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 ViroGates. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and ViroGates.

Diversification Opportunities for BioPorto and ViroGates

-0.67

Correlation Coefficient

BioPorto  ViroGates

Excellent diversification

The 3 months correlation between BioPorto and ViroGates is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and ViroGates AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViroGates AS 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 ViroGates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViroGates AS has no effect on the direction of BioPorto i.e., BioPorto and ViroGates go up and down completely randomly.

Pair Corralation between BioPorto and ViroGates

Assuming the 90 days trading horizon BioPorto is expected to under-perform the ViroGates. But the stock apears to be less risky and, when comparing its historical volatility, BioPorto is 4.5 times less risky than ViroGates. The stock trades about -0.11 of its potential returns per unit of risk. The ViroGates AS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  570.00  in ViroGates AS on September 4, 2024 and sell it today you would earn a total of  770.00  from holding ViroGates AS or generate 135.09% return on investment over 90 days.

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

BioPorto  vs.  ViroGates AS

BioPorto

Risk-Adjusted Performance

0 of 100

Very Weak

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

ViroGates AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ViroGates AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ViroGates displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioPorto and ViroGates

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

The idea behind BioPorto and ViroGates AS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.