Correlation Between Iron Mountain and Biogen

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

By analyzing existing cross correlation between Iron Mountain Incorporated and Biogen Inc, you can compare the effects of market volatilities on Iron Mountain and Biogen 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 Iron Mountain with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Biogen.

Diversification Opportunities for Iron Mountain and Biogen

-0.18

Correlation Coefficient

Iron Mountain  Biogen

Good diversification

The 3 months correlation between Iron and Biogen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Iron Mountain i.e., Iron Mountain and Biogen go up and down completely randomly.

Pair Corralation between Iron Mountain and Biogen

Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to generate 1.36 times more return on investment than Biogen. However, Iron Mountain is 1.36 times more volatile than Biogen Inc. It trades about 0.0 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.15 per unit of risk. If you would invest  65,530  in Iron Mountain Incorporated on September 25, 2024 and sell it today you would lose (1,270) from holding Iron Mountain Incorporated or give up 1.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Iron Mountain Incorporated  vs.  Biogen Inc

Iron Mountain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Mountain Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iron Mountain is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Biogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biogen Inc 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 forward 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 Iron Mountain and Biogen

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

The idea behind Iron Mountain Incorporated and Biogen Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.