Correlation Between Infant Bacterial and BioInvent International

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

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

Diversification Opportunities for Infant Bacterial and BioInvent International

-0.63

Correlation Coefficient

Infant Bacterial  BioInvent International

Excellent diversification

The 3 months correlation between Infant and BioInvent is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Infant Bacterial Therapeutics and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International and Infant Bacterial 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 Infant Bacterial Therapeutics are associated (or correlated) with BioInvent International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioInvent International has no effect on the direction of Infant Bacterial i.e., Infant Bacterial and BioInvent International go up and down completely randomly.

Pair Corralation between Infant Bacterial and BioInvent International

Assuming the 90 days trading horizon Infant Bacterial Therapeutics is expected to generate 5.21 times more return on investment than BioInvent International. However, Infant Bacterial is 5.21 times more volatile than BioInvent International AB. It trades about 0.25 of its potential returns per unit of risk. BioInvent International AB is currently generating about -0.41 per unit of risk. If you would invest  3,900  in Infant Bacterial Therapeutics on September 24, 2024 and sell it today you would earn a total of  2,000  from holding Infant Bacterial Therapeutics or generate 51.28% return on investment over 90 days.

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

Infant Bacterial Therapeutics  vs.  BioInvent International AB

Infant Bacterial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Infant Bacterial Therapeutics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Infant Bacterial unveiled solid returns over the last few months and may actually be approaching a breakup point.

BioInvent International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioInvent International AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Infant Bacterial and BioInvent International

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

The idea behind Infant Bacterial Therapeutics and BioInvent 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.