Correlation Between Xbrane Biopharma and Bio Works

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

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

Diversification Opportunities for Xbrane Biopharma and Bio Works

-0.02

Correlation Coefficient

Xbrane Biopharma  Bio Works

Good diversification

The 3 months correlation between Xbrane and Bio is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Xbrane Biopharma AB and Bio Works Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Works Technologies and Xbrane Biopharma 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 Xbrane Biopharma AB are associated (or correlated) with Bio Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Works Technologies has no effect on the direction of Xbrane Biopharma i.e., Xbrane Biopharma and Bio Works go up and down completely randomly.

Pair Corralation between Xbrane Biopharma and Bio Works

Assuming the 90 days trading horizon Xbrane Biopharma AB is expected to generate 1.68 times more return on investment than Bio Works. However, Xbrane Biopharma is 1.68 times more volatile than Bio Works Technologies AB. It trades about 0.11 of its potential returns per unit of risk. Bio Works Technologies AB is currently generating about 0.16 per unit of risk. If you would invest  16.00  in Xbrane Biopharma AB on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Xbrane Biopharma AB or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Xbrane Biopharma AB  vs.  Bio Works Technologies AB

Xbrane Biopharma

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xbrane Biopharma AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Xbrane Biopharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Bio Works Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Works Technologies AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Bio Works sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xbrane Biopharma and Bio Works

The main advantage of trading using opposite Xbrane Biopharma and Bio Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xbrane Biopharma position performs unexpectedly, Bio Works 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 Bio Works will offset losses from the drop in Bio Works' long position.

The idea behind Xbrane Biopharma AB and Bio Works Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.