Correlation Between Biogen and DKIJAP
Can any of the company-specific risk be diversified away by investing in both Biogen and DKIJAP 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 DKIJAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Investeringsforeningen Danske Invest, you can compare the effects of market volatilities on Biogen and DKIJAP 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 DKIJAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and DKIJAP.
Diversification Opportunities for Biogen and DKIJAP
Modest diversification
The 3 months correlation between Biogen and DKIJAP is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Investeringsforeningen Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen 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 DKIJAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Biogen i.e., Biogen and DKIJAP go up and down completely randomly.
Pair Corralation between Biogen and DKIJAP
Given the investment horizon of 90 days Biogen Inc is expected to under-perform the DKIJAP. In addition to that, Biogen is 1.31 times more volatile than Investeringsforeningen Danske Invest. It trades about -0.1 of its total potential returns per unit of risk. Investeringsforeningen Danske Invest is currently generating about 0.05 per unit of volatility. If you would invest 11,994 in Investeringsforeningen Danske Invest on January 20, 2024 and sell it today you would earn a total of 1,546 from holding Investeringsforeningen Danske Invest or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Biogen Inc vs. Investeringsforeningen Danske
Performance |
| Timeline |
| Biogen Inc |
| Investeringsforeningen |
Biogen and DKIJAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biogen and DKIJAP
The main advantage of trading using opposite Biogen and DKIJAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, DKIJAP 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 DKIJAP will offset losses from the drop in DKIJAP's long position.| Biogen vs. Bristol Myers Squibb | Biogen vs. AbbVie Inc | Biogen vs. Merck Company | Biogen vs. Gilead Sciences |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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