Correlation Between Jupiter Wellness and Biofrontera

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

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

Diversification Opportunities for Jupiter Wellness and Biofrontera

-0.05

Correlation Coefficient

Jupiter Wellness  Biofrontera

Good diversification

The 3 months correlation between Jupiter and Biofrontera is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Wellness and Biofrontera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera and Jupiter Wellness 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 Jupiter Wellness 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 Jupiter Wellness i.e., Jupiter Wellness and Biofrontera go up and down completely randomly.

Pair Corralation between Jupiter Wellness and Biofrontera

If you would invest  101.00  in Biofrontera on October 25, 2024 and sell it today you would earn a total of  1.00  from holding Biofrontera or generate 0.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Jupiter Wellness  vs.  Biofrontera

Jupiter Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jupiter Wellness is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Biofrontera

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera are ranked lower than 4 (%) 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 Jupiter Wellness and Biofrontera

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

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.