Correlation Between CureVac NV and Biofrontera

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

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

Diversification Opportunities for CureVac NV and Biofrontera

0.57

Correlation Coefficient

CureVac NV  Biofrontera

Very weak diversification

The 3 months correlation between CureVac and Biofrontera is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and CureVac NV 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 CureVac NV are associated (or correlated) with Biofrontera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera has no effect on the direction of CureVac NV i.e., CureVac NV and Biofrontera go up and down completely randomly.

Pair Corralation between CureVac NV and Biofrontera

Given the investment horizon of 90 days CureVac NV is expected to generate 0.55 times more return on investment than Biofrontera. However, CureVac NV is 1.81 times less risky than Biofrontera. It trades about -0.02 of its potential returns per unit of risk. Biofrontera is currently generating about -0.03 per unit of risk. If you would invest  1,046  in CureVac NV on October 11, 2024 and sell it today you would lose (623.00) from holding CureVac NV or give up 59.56% of portfolio value over 90 days.

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

CureVac NV  vs.  Biofrontera

CureVac NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, CureVac NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Biofrontera

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Biofrontera demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CureVac NV and Biofrontera

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

The idea behind CureVac NV and Biofrontera 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.