Correlation Between Biophytis and Crossject

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

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

Diversification Opportunities for Biophytis and Crossject

0.47

Correlation Coefficient

Biophytis  Crossject

Very weak diversification

The 3 months correlation between Biophytis and Crossject is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and Crossject in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossject and Biophytis 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 Biophytis SA are associated (or correlated) with Crossject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossject has no effect on the direction of Biophytis i.e., Biophytis and Crossject go up and down completely randomly.

Pair Corralation between Biophytis and Crossject

Assuming the 90 days trading horizon Biophytis SA is expected to generate 1.21 times more return on investment than Crossject. However, Biophytis is 1.21 times more volatile than Crossject. It trades about -0.01 of its potential returns per unit of risk. Crossject is currently generating about -0.03 per unit of risk. If you would invest  40.00  in Biophytis SA on September 29, 2024 and sell it today you would lose (3.00) from holding Biophytis SA or give up 7.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Biophytis SA  vs.  Crossject

Biophytis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biophytis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Biophytis is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Crossject

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crossject has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Biophytis and Crossject

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

The idea behind Biophytis SA and Crossject 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.