Correlation Between Biogen and Orphazyme
Can any of the company-specific risk be diversified away by investing in both Biogen and Orphazyme 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 Orphazyme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biogen Inc and Orphazyme AS, you can compare the effects of market volatilities on Biogen and Orphazyme 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 Orphazyme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biogen and Orphazyme.
Diversification Opportunities for Biogen and Orphazyme
Modest diversification
The 3 months correlation between Biogen and Orphazyme is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Biogen Inc and Orphazyme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orphazyme AS 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 Orphazyme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orphazyme AS has no effect on the direction of Biogen i.e., Biogen and Orphazyme go up and down completely randomly.
Pair Corralation between Biogen and Orphazyme
Given the investment horizon of 90 days Biogen Inc is expected to under-perform the Orphazyme. But the stock apears to be less risky and, when comparing its historical volatility, Biogen Inc is 3.0 times less risky than Orphazyme. The stock trades about -0.17 of its potential returns per unit of risk. The Orphazyme AS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 120,160 in Orphazyme AS on January 26, 2024 and sell it today you would lose (12,680) from holding Orphazyme AS or give up 10.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Biogen Inc vs. Orphazyme AS
Performance |
Timeline |
Biogen Inc |
Orphazyme AS |
Biogen and Orphazyme Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Biogen and Orphazyme
The main advantage of trading using opposite Biogen and Orphazyme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biogen position performs unexpectedly, Orphazyme 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 Orphazyme will offset losses from the drop in Orphazyme's long position.Biogen vs. Terns Pharmaceuticals | Biogen vs. Amylyx Pharmaceuticals | Biogen vs. Acumen Pharmaceuticals | Biogen vs. Inozyme PharmaInc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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