Correlation Between Cell Source and Bavarian Nordic

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

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

Diversification Opportunities for Cell Source and Bavarian Nordic

0.16

Correlation Coefficient

Cell Source  Bavarian Nordic

Average diversification

The 3 months correlation between Cell and Bavarian is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cell Source and Bavarian Nordic AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bavarian Nordic AS and Cell Source 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 Cell Source are associated (or correlated) with Bavarian Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bavarian Nordic AS has no effect on the direction of Cell Source i.e., Cell Source and Bavarian Nordic go up and down completely randomly.

Pair Corralation between Cell Source and Bavarian Nordic

Given the investment horizon of 90 days Cell Source is expected to under-perform the Bavarian Nordic. In addition to that, Cell Source is 5.91 times more volatile than Bavarian Nordic AS. It trades about -0.01 of its total potential returns per unit of risk. Bavarian Nordic AS is currently generating about -0.05 per unit of volatility. If you would invest  868.00  in Bavarian Nordic AS on December 21, 2024 and sell it today you would lose (71.00) from holding Bavarian Nordic AS or give up 8.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Cell Source  vs.  Bavarian Nordic AS

Cell Source

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cell Source has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bavarian Nordic AS

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cell Source and Bavarian Nordic

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

The idea behind Cell Source and Bavarian Nordic 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.