Correlation Between DBV Technologies and Abivax SA

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

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

Diversification Opportunities for DBV Technologies and Abivax SA

-0.64

Correlation Coefficient

DBV Technologies  Abivax SA

Excellent diversification

The 3 months correlation between DBV and Abivax is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding DBV Technologies SA and Abivax SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abivax SA and DBV Technologies 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 DBV Technologies SA are associated (or correlated) with Abivax SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abivax SA has no effect on the direction of DBV Technologies i.e., DBV Technologies and Abivax SA go up and down completely randomly.

Pair Corralation between DBV Technologies and Abivax SA

Assuming the 90 days trading horizon DBV Technologies SA is expected to under-perform the Abivax SA. But the stock apears to be less risky and, when comparing its historical volatility, DBV Technologies SA is 1.16 times less risky than Abivax SA. The stock trades about -0.05 of its potential returns per unit of risk. The Abivax SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  584.00  in Abivax SA on December 4, 2024 and sell it today you would earn a total of  106.00  from holding Abivax SA or generate 18.15% return on investment over 90 days.

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

DBV Technologies SA  vs.  Abivax SA

DBV Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DBV Technologies SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DBV Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Abivax SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abivax SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 DBV Technologies and Abivax SA

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

The idea behind DBV Technologies SA and Abivax SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.