Correlation Between Biogen and Bls Invest
Can any of the company-specific risk be diversified away by investing in both Biogen and Bls Invest 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 Biogen and Bls Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Bls Invest Globale, you can compare the effects of market volatilities on Biogen and Bls Invest 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 Biogen with a short position of Bls Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Bls Invest.
Diversification Opportunities for Biogen and Bls Invest
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Biogen and Bls is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Bls Invest Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bls Invest Globale and Biogen 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 Biogen Inc are associated (or correlated) with Bls Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bls Invest Globale has no effect on the direction of Biogen i.e., Biogen and Bls Invest go up and down completely randomly.
Pair Corralation between Biogen and Bls Invest
Given the investment horizon of 90 days Biogen Inc is expected to under-perform the Bls Invest. In addition to that, Biogen is 1.82 times more volatile than Bls Invest Globale. It trades about -0.47 of its total potential returns per unit of risk. Bls Invest Globale is currently generating about -0.17 per unit of volatility. If you would invest 187,700 in Bls Invest Globale on January 19, 2024 and sell it today you would lose (4,377) from holding Bls Invest Globale or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Biogen Inc vs. Bls Invest Globale
Performance |
| Timeline |
| Biogen Inc |
| Bls Invest Globale |
Biogen and Bls Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and Bls Invest
The main advantage of trading using opposite Biogen and Bls Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Bls Invest 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 Bls Invest will offset losses from the drop in Bls Invest's long position.The idea behind Biogen Inc and Bls Invest Globale 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.| Bls Invest vs. Novo Nordisk AS | Bls Invest vs. Nordea Bank Abp | Bls Invest vs. DSV Panalpina AS | Bls Invest vs. AP Mller |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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