Correlation Between CBrain AS and Bio Works
Can any of the company-specific risk be diversified away by investing in both CBrain AS and Bio Works 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 CBrain AS and Bio Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cBrain AS and Bio Works Technologies AB, you can compare the effects of market volatilities on CBrain AS and Bio Works 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 CBrain AS with a short position of Bio Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBrain AS and Bio Works.
Diversification Opportunities for CBrain AS and Bio Works
Excellent diversification
The 3 months correlation between CBrain and Bio is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding cBrain AS and Bio Works Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Works Technologies and CBrain AS 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 cBrain AS are associated (or correlated) with Bio Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Works Technologies has no effect on the direction of CBrain AS i.e., CBrain AS and Bio Works go up and down completely randomly.
Pair Corralation between CBrain AS and Bio Works
Assuming the 90 days trading horizon cBrain AS is expected to under-perform the Bio Works. But the stock apears to be less risky and, when comparing its historical volatility, cBrain AS is 1.14 times less risky than Bio Works. The stock trades about -0.14 of its potential returns per unit of risk. The Bio Works Technologies AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Bio Works Technologies AB on December 2, 2024 and sell it today you would earn a total of 58.00 from holding Bio Works Technologies AB or generate 65.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
cBrain AS vs. Bio Works Technologies AB
Performance |
Timeline |
cBrain AS |
Bio Works Technologies |
CBrain AS and Bio Works Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CBrain AS and Bio Works
The main advantage of trading using opposite CBrain AS and Bio Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBrain AS position performs unexpectedly, Bio Works 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 Bio Works will offset losses from the drop in Bio Works' long position.CBrain AS vs. ChemoMetec AS | CBrain AS vs. Ambu AS | CBrain AS vs. Genmab AS | CBrain AS vs. Zealand Pharma AS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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