Correlation Between Guardion Health and Biofrontera

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

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

Diversification Opportunities for Guardion Health and Biofrontera

0.0

Correlation Coefficient

Guardion Health  Biofrontera

Pay attention - limited upside

The 3 months correlation between Guardion and Biofrontera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guardion Health Sciences and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Guardion Health 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 Guardion Health Sciences 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 Guardion Health i.e., Guardion Health and Biofrontera go up and down completely randomly.

Pair Corralation between Guardion Health and Biofrontera

If you would invest  97.00  in Biofrontera on October 23, 2024 and sell it today you would earn a total of  13.00  from holding Biofrontera or generate 13.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Guardion Health Sciences  vs.  Biofrontera

Guardion Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardion Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Guardion Health is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Biofrontera

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Biofrontera demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardion Health and Biofrontera

The main advantage of trading using opposite Guardion Health and Biofrontera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardion Health 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 Guardion Health Sciences 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.