Correlation Between Zivo Bioscience and Biofrontera Warrants

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

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

Diversification Opportunities for Zivo Bioscience and Biofrontera Warrants

-0.69

Correlation Coefficient

Zivo Bioscience  Biofrontera Warrants

Excellent diversification

The 3 months correlation between Zivo and Biofrontera is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zivo Bioscience and Biofrontera Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera Warrants and Zivo Bioscience 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 Zivo Bioscience are associated (or correlated) with Biofrontera Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera Warrants has no effect on the direction of Zivo Bioscience i.e., Zivo Bioscience and Biofrontera Warrants go up and down completely randomly.

Pair Corralation between Zivo Bioscience and Biofrontera Warrants

If you would invest  2.09  in Biofrontera Warrants on September 21, 2024 and sell it today you would earn a total of  6.91  from holding Biofrontera Warrants or generate 330.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.63%
Values	Daily Returns

Zivo Bioscience  vs.  Biofrontera Warrants

Zivo Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zivo Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zivo Bioscience is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Biofrontera Warrants

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera Warrants are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Biofrontera Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zivo Bioscience and Biofrontera Warrants

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

The idea behind Zivo Bioscience and Biofrontera Warrants 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.