Correlation Between USU Software and Biogen

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

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

Diversification Opportunities for USU Software and Biogen

-0.03

Correlation Coefficient

USU Software  Biogen

Good diversification

The 3 months correlation between USU and Biogen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and USU Software 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 USU Software AG 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 USU Software i.e., USU Software and Biogen go up and down completely randomly.

Pair Corralation between USU Software and Biogen

Assuming the 90 days trading horizon USU Software AG is expected to generate 0.69 times more return on investment than Biogen. However, USU Software AG is 1.44 times less risky than Biogen. It trades about -0.04 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.23 per unit of risk. If you would invest  2,240  in USU Software AG on October 25, 2024 and sell it today you would lose (60.00) from holding USU Software AG or give up 2.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

USU Software AG  vs.  Biogen Inc

USU Software AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days USU Software AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, USU Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with USU Software and Biogen

The main advantage of trading using opposite USU Software and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software 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 USU Software AG 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.