Correlation Between ExpreS2ion Biotech and Biovica International

Can any of the company-specific risk be diversified away by investing in both ExpreS2ion Biotech and Biovica International 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 ExpreS2ion Biotech and Biovica International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ExpreS2ion Biotech Holding and Biovica International AB, you can compare the effects of market volatilities on ExpreS2ion Biotech and Biovica International 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 ExpreS2ion Biotech with a short position of Biovica International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExpreS2ion Biotech and Biovica International.

Diversification Opportunities for ExpreS2ion Biotech and Biovica International

-0.08

Correlation Coefficient

ExpreS2ion Biotech  Biovica International

Good diversification

The 3 months correlation between ExpreS2ion and Biovica is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ExpreS2ion Biotech Holding and Biovica International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biovica International and ExpreS2ion Biotech 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 ExpreS2ion Biotech Holding are associated (or correlated) with Biovica International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biovica International has no effect on the direction of ExpreS2ion Biotech i.e., ExpreS2ion Biotech and Biovica International go up and down completely randomly.

Pair Corralation between ExpreS2ion Biotech and Biovica International

Assuming the 90 days trading horizon ExpreS2ion Biotech Holding is expected to generate 0.96 times more return on investment than Biovica International. However, ExpreS2ion Biotech Holding is 1.04 times less risky than Biovica International. It trades about 0.1 of its potential returns per unit of risk. Biovica International AB is currently generating about -0.04 per unit of risk. If you would invest  1,996  in ExpreS2ion Biotech Holding on December 1, 2024 and sell it today you would earn a total of  644.00  from holding ExpreS2ion Biotech Holding or generate 32.26% return on investment over 90 days.

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

ExpreS2ion Biotech Holding  vs.  Biovica International AB

ExpreS2ion Biotech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ExpreS2ion Biotech Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ExpreS2ion Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Biovica International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biovica International AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward 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.

Pair Trading with ExpreS2ion Biotech and Biovica International

The main advantage of trading using opposite ExpreS2ion Biotech and Biovica International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExpreS2ion Biotech position performs unexpectedly, Biovica International 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 Biovica International will offset losses from the drop in Biovica International's long position.

The idea behind ExpreS2ion Biotech Holding and Biovica International AB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.