Correlation Between Ginkgo Bioworks and Biofrontera

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

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

Diversification Opportunities for Ginkgo Bioworks and Biofrontera

0.74

Correlation Coefficient

Ginkgo Bioworks  Biofrontera

Poor diversification

The 3 months correlation between Ginkgo and Biofrontera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Ginkgo Bioworks i.e., Ginkgo Bioworks and Biofrontera go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Biofrontera

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the Biofrontera. In addition to that, Ginkgo Bioworks is 1.8 times more volatile than Biofrontera. It trades about -0.03 of its total potential returns per unit of risk. Biofrontera is currently generating about 0.03 per unit of volatility. If you would invest  101.00  in Biofrontera on December 21, 2024 and sell it today you would earn a total of  2.00  from holding Biofrontera or generate 1.98% return on investment over 90 days.

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

Ginkgo Bioworks Holdings  vs.  Biofrontera

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ginkgo Bioworks Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Biofrontera

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Biofrontera may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ginkgo Bioworks and Biofrontera

The main advantage of trading using opposite Ginkgo Bioworks and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.