Correlation Between Biocartis Group and Pharming Group

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

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

Diversification Opportunities for Biocartis Group and Pharming Group

0.0

Correlation Coefficient

Biocartis Group  Pharming Group

Pay attention - limited upside

The 3 months correlation between Biocartis and Pharming is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biocartis Group NV and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group NV and Biocartis Group 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 Biocartis Group NV are associated (or correlated) with Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of Biocartis Group i.e., Biocartis Group and Pharming Group go up and down completely randomly.

Pair Corralation between Biocartis Group and Pharming Group

If you would invest  69.00  in Pharming Group NV on September 20, 2024 and sell it today you would earn a total of  11.00  from holding Pharming Group NV or generate 15.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Biocartis Group NV  vs.  Pharming Group NV

Biocartis Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biocartis Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Biocartis Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pharming Group NV

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pharming Group NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Pharming Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biocartis Group and Pharming Group

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

The idea behind Biocartis Group NV and Pharming Group NV 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.