Correlation Between Biotage AB and Visa
Can any of the company-specific risk be diversified away by investing in both Biotage AB and Visa 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 Biotage AB and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biotage AB and Visa Class A, you can compare the effects of market volatilities on Biotage AB and Visa 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 Biotage AB with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biotage AB and Visa.
Diversification Opportunities for Biotage AB and Visa
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biotage and Visa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Biotage 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 Biotage AB are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Biotage AB i.e., Biotage AB and Visa go up and down completely randomly.
Pair Corralation between Biotage AB and Visa
Assuming the 90 days horizon Biotage AB is expected to generate 7.47 times more return on investment than Visa. However, Biotage AB is 7.47 times more volatile than Visa Class A. It trades about 0.16 of its potential returns per unit of risk. Visa Class A is currently generating about -0.04 per unit of risk. If you would invest 1,200 in Biotage AB on January 18, 2024 and sell it today you would earn a total of 487.00 from holding Biotage AB or generate 40.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Biotage AB vs. Visa Class A
Performance |
| Timeline |
| Biotage AB |
| Visa Class A |
Biotage AB and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biotage AB and Visa
The main advantage of trading using opposite Biotage AB and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biotage AB position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| Biotage AB vs. Sunlands Technology Group | Biotage AB vs. Exceed World | Biotage AB vs. HUMANA INC | Biotage AB vs. Aquagold International |
| Visa vs. Diamond Hill Investment | Visa vs. Distoken Acquisition | Visa vs. AllianceBernstein Holding LP | Visa vs. Associated Capital Group |
Check out your portfolio center.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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