Correlation Between Nanobiotix and Aelis Farma
Can any of the company-specific risk be diversified away by investing in both Nanobiotix and Aelis Farma 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 Nanobiotix and Aelis Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanobiotix SA and Aelis Farma SA, you can compare the effects of market volatilities on Nanobiotix and Aelis Farma 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 Nanobiotix with a short position of Aelis Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanobiotix and Aelis Farma.
Diversification Opportunities for Nanobiotix and Aelis Farma
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanobiotix and Aelis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nanobiotix SA and Aelis Farma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aelis Farma SA and Nanobiotix 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 Nanobiotix SA are associated (or correlated) with Aelis Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aelis Farma SA has no effect on the direction of Nanobiotix i.e., Nanobiotix and Aelis Farma go up and down completely randomly.
Pair Corralation between Nanobiotix and Aelis Farma
Assuming the 90 days trading horizon Nanobiotix SA is expected to generate 0.95 times more return on investment than Aelis Farma. However, Nanobiotix SA is 1.06 times less risky than Aelis Farma. It trades about -0.14 of its potential returns per unit of risk. Aelis Farma SA is currently generating about -0.38 per unit of risk. If you would invest 438.00 in Nanobiotix SA on September 15, 2024 and sell it today you would lose (116.00) from holding Nanobiotix SA or give up 26.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.48% |
Values | Daily Returns |
Nanobiotix SA vs. Aelis Farma SA
Performance |
Timeline |
Nanobiotix SA |
Aelis Farma SA |
Nanobiotix and Aelis Farma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanobiotix and Aelis Farma
The main advantage of trading using opposite Nanobiotix and Aelis Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanobiotix position performs unexpectedly, Aelis Farma 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 Aelis Farma will offset losses from the drop in Aelis Farma's long position.The idea behind Nanobiotix SA and Aelis Farma SA 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.Aelis Farma vs. Fiducial Office Solutions | Aelis Farma vs. Sidetrade | Aelis Farma vs. Union Technologies Informatique | Aelis Farma vs. Sartorius Stedim Biotech |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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