Correlation Between Bavarian Nordic and Pmv Pharmaceuticals

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

By analyzing existing cross correlation between Bavarian Nordic AS and Pmv Pharmaceuticals, you can compare the effects of market volatilities on Bavarian Nordic and Pmv Pharmaceuticals 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 Bavarian Nordic with a short position of Pmv Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bavarian Nordic and Pmv Pharmaceuticals.

Diversification Opportunities for Bavarian Nordic and Pmv Pharmaceuticals

0.24

Correlation Coefficient

Bavarian Nordic  Pmv Pharmaceuticals

Modest diversification

The 3 months correlation between Bavarian and Pmv is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bavarian Nordic AS and Pmv Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pmv Pharmaceuticals and Bavarian Nordic 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 Bavarian Nordic AS are associated (or correlated) with Pmv Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pmv Pharmaceuticals has no effect on the direction of Bavarian Nordic i.e., Bavarian Nordic and Pmv Pharmaceuticals go up and down completely randomly.

Pair Corralation between Bavarian Nordic and Pmv Pharmaceuticals

Assuming the 90 days horizon Bavarian Nordic AS is expected to under-perform the Pmv Pharmaceuticals. In addition to that, Bavarian Nordic is 1.1 times more volatile than Pmv Pharmaceuticals. It trades about -0.07 of its total potential returns per unit of risk. Pmv Pharmaceuticals is currently generating about 0.03 per unit of volatility. If you would invest  150.00  in Pmv Pharmaceuticals on October 7, 2024 and sell it today you would earn a total of  5.00  from holding Pmv Pharmaceuticals or generate 3.33% return on investment over 90 days.

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

Bavarian Nordic AS  vs.  Pmv Pharmaceuticals

Bavarian Nordic AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pmv Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pmv Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Pmv Pharmaceuticals is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bavarian Nordic and Pmv Pharmaceuticals

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

The idea behind Bavarian Nordic AS and Pmv Pharmaceuticals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.