Correlation Between Hansa Biopharma and ExpreS2ion Biotech

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

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

Diversification Opportunities for Hansa Biopharma and ExpreS2ion Biotech

0.74

Correlation Coefficient

Hansa Biopharma  ExpreS2ion Biotech

Poor diversification

The 3 months correlation between Hansa and ExpreS2ion is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech and Hansa Biopharma 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 Hansa Biopharma AB are associated (or correlated) with ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and ExpreS2ion Biotech go up and down completely randomly.

Pair Corralation between Hansa Biopharma and ExpreS2ion Biotech

Assuming the 90 days trading horizon Hansa Biopharma AB is expected to under-perform the ExpreS2ion Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Hansa Biopharma AB is 2.21 times less risky than ExpreS2ion Biotech. The stock trades about -0.2 of its potential returns per unit of risk. The ExpreS2ion Biotech Holding is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  3,600  in ExpreS2ion Biotech Holding on September 2, 2024 and sell it today you would lose (1,515) from holding ExpreS2ion Biotech Holding or give up 42.08% of portfolio value over 90 days.

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

Hansa Biopharma AB  vs.  ExpreS2ion Biotech Holding

Hansa Biopharma AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hansa Biopharma AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hansa Biopharma and ExpreS2ion Biotech

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

The idea behind Hansa Biopharma AB and ExpreS2ion Biotech Holding 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.