Correlation Between Bellevue Life and Forbion European

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

By analyzing existing cross correlation between Bellevue Life Sciences and Forbion European Acquisition, you can compare the effects of market volatilities on Bellevue Life and Forbion European 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 Bellevue Life with a short position of Forbion European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellevue Life and Forbion European.

Diversification Opportunities for Bellevue Life and Forbion European

0.6

Correlation Coefficient

Bellevue Life  Forbion European

Poor diversification

The 3 months correlation between Bellevue and Forbion is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bellevue Life Sciences and Forbion European Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forbion European Acq and Bellevue Life 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 Bellevue Life Sciences are associated (or correlated) with Forbion European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forbion European Acq has no effect on the direction of Bellevue Life i.e., Bellevue Life and Forbion European go up and down completely randomly.

Pair Corralation between Bellevue Life and Forbion European

Given the investment horizon of 90 days Bellevue Life Sciences is expected to generate 341.97 times more return on investment than Forbion European. However, Bellevue Life is 341.97 times more volatile than Forbion European Acquisition. It trades about 0.05 of its potential returns per unit of risk. Forbion European Acquisition is currently generating about 0.24 per unit of risk. If you would invest  0.00  in Bellevue Life Sciences on October 11, 2024 and sell it today you would earn a total of  1,135  from holding Bellevue Life Sciences or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	27.79%
Values	Daily Returns

Bellevue Life Sciences  vs.  Forbion European Acquisition

Bellevue Life Sciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Life Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Bellevue Life is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Forbion European Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forbion European Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Forbion European is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bellevue Life and Forbion European

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

The idea behind Bellevue Life Sciences and Forbion European Acquisition 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.