Correlation Between SPORTING and Biogen
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Biogen Inc, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Biogen.
Diversification Opportunities for SPORTING and Biogen
Very weak diversification
The 3 months correlation between SPORTING and Biogen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Biogen go up and down completely randomly.
Pair Corralation between SPORTING and Biogen
Assuming the 90 days trading horizon SPORTING is expected to under-perform the Biogen. In addition to that, SPORTING is 2.13 times more volatile than Biogen Inc. It trades about -0.06 of its total potential returns per unit of risk. Biogen Inc is currently generating about -0.12 per unit of volatility. If you would invest 16,305 in Biogen Inc on October 7, 2024 and sell it today you would lose (1,550) from holding Biogen Inc or give up 9.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPORTING vs. Biogen Inc
Performance |
Timeline |
SPORTING |
Biogen Inc |
SPORTING and Biogen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPORTING and Biogen
The main advantage of trading using opposite SPORTING and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.SPORTING vs. ANTA SPORTS PRODUCT | SPORTING vs. United Utilities Group | SPORTING vs. NORTHEAST UTILITIES | SPORTING vs. Martin Marietta Materials |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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