Correlation Between ExpreS2ion Biotech and Lipidor Ab

Can any of the company-specific risk be diversified away by investing in both ExpreS2ion Biotech and Lipidor Ab 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 Lipidor Ab 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 Lipidor Ab, you can compare the effects of market volatilities on ExpreS2ion Biotech and Lipidor Ab 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 Lipidor Ab. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExpreS2ion Biotech and Lipidor Ab.

Diversification Opportunities for ExpreS2ion Biotech and Lipidor Ab

0.31

Correlation Coefficient

ExpreS2ion Biotech  Lipidor Ab

Weak diversification

The 3 months correlation between ExpreS2ion and Lipidor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ExpreS2ion Biotech Holding and Lipidor Ab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipidor Ab 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 Lipidor Ab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipidor Ab has no effect on the direction of ExpreS2ion Biotech i.e., ExpreS2ion Biotech and Lipidor Ab go up and down completely randomly.

Pair Corralation between ExpreS2ion Biotech and Lipidor Ab

Assuming the 90 days trading horizon ExpreS2ion Biotech Holding is expected to under-perform the Lipidor Ab. In addition to that, ExpreS2ion Biotech is 1.27 times more volatile than Lipidor Ab. It trades about -0.06 of its total potential returns per unit of risk. Lipidor Ab is currently generating about 0.22 per unit of volatility. If you would invest  13.00  in Lipidor Ab on October 9, 2024 and sell it today you would earn a total of  11.00  from holding Lipidor Ab or generate 84.62% return on investment over 90 days.

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

ExpreS2ion Biotech Holding  vs.  Lipidor Ab

ExpreS2ion Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExpreS2ion Biotech Holding 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 basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lipidor Ab

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lipidor Ab are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lipidor Ab unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExpreS2ion Biotech and Lipidor Ab

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

The idea behind ExpreS2ion Biotech Holding and Lipidor 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.