Correlation Between XSpray Pharma and BioInvent International

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

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

Diversification Opportunities for XSpray Pharma and BioInvent International

0.26

Correlation Coefficient

XSpray Pharma  BioInvent International

Modest diversification

The 3 months correlation between XSpray and BioInvent is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding XSpray Pharma 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 XSpray Pharma 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 XSpray Pharma 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 XSpray Pharma i.e., XSpray Pharma and BioInvent International go up and down completely randomly.

Pair Corralation between XSpray Pharma and BioInvent International

Assuming the 90 days trading horizon XSpray Pharma AB is expected to under-perform the BioInvent International. In addition to that, XSpray Pharma is 1.43 times more volatile than BioInvent International AB. It trades about -0.18 of its total potential returns per unit of risk. BioInvent International AB is currently generating about -0.17 per unit of volatility. If you would invest  4,395  in BioInvent International AB on October 12, 2024 and sell it today you would lose (1,295) from holding BioInvent International AB or give up 29.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

XSpray Pharma AB  vs.  BioInvent International AB

XSpray Pharma AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with XSpray Pharma and BioInvent International

The main advantage of trading using opposite XSpray Pharma and BioInvent International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XSpray Pharma 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 XSpray Pharma 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.