Correlation Between Senzime AB and BioInvent International

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

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

Diversification Opportunities for Senzime AB and BioInvent International

0.39

Correlation Coefficient

Senzime AB  BioInvent International

Weak diversification

The 3 months correlation between Senzime and BioInvent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB and BioInvent International AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioInvent International and Senzime AB 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 Senzime AB 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 Senzime AB i.e., Senzime AB and BioInvent International go up and down completely randomly.

Pair Corralation between Senzime AB and BioInvent International

Assuming the 90 days trading horizon Senzime AB is expected to generate 1.26 times more return on investment than BioInvent International. However, Senzime AB is 1.26 times more volatile than BioInvent International AB. It trades about 0.15 of its potential returns per unit of risk. BioInvent International AB is currently generating about -0.12 per unit of risk. If you would invest  592.00  in Senzime AB on October 10, 2024 and sell it today you would earn a total of  48.00  from holding Senzime AB or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Senzime AB  vs.  BioInvent International AB

Senzime AB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senzime AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Senzime AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 Senzime AB and BioInvent International

The main advantage of trading using opposite Senzime AB and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime AB 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 Senzime AB 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 Transaction History module to view history of all your transactions and understand their impact on performance.