Correlation Between Vitrolife and BioInvent International

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

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

Diversification Opportunities for Vitrolife and BioInvent International

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Correlation Coefficient

Vitrolife  BioInvent International

Pay attention - limited upside

The 3 months correlation between Vitrolife and BioInvent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vitrolife 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 Vitrolife 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 Vitrolife 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 Vitrolife i.e., Vitrolife and BioInvent International go up and down completely randomly.

Pair Corralation between Vitrolife and BioInvent International

Assuming the 90 days trading horizon Vitrolife AB is expected to under-perform the BioInvent International. But the stock apears to be less risky and, when comparing its historical volatility, Vitrolife AB is 1.44 times less risky than BioInvent International. The stock trades about -0.11 of its potential returns per unit of risk. The BioInvent International AB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  4,425  in BioInvent International AB on September 12, 2024 and sell it today you would lose (275.00) from holding BioInvent International AB or give up 6.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vitrolife AB  vs.  BioInvent International AB

Vitrolife AB

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Vitrolife AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BioInvent International

Risk-Adjusted Performance

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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 comparatively stable basic indicators, BioInvent International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vitrolife and BioInvent International

The main advantage of trading using opposite Vitrolife and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitrolife 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 Vitrolife 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.