Correlation Between Biofrontera Warrants and Inspira Technologies

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

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

Diversification Opportunities for Biofrontera Warrants and Inspira Technologies

-0.29

Correlation Coefficient

Biofrontera Warrants  Inspira Technologies

Very good diversification

The 3 months correlation between Biofrontera and Inspira is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Biofrontera Warrants and Inspira Technologies Oxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspira Technologies Oxy and Biofrontera Warrants 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 Biofrontera Warrants are associated (or correlated) with Inspira Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspira Technologies Oxy has no effect on the direction of Biofrontera Warrants i.e., Biofrontera Warrants and Inspira Technologies go up and down completely randomly.

Pair Corralation between Biofrontera Warrants and Inspira Technologies

Assuming the 90 days horizon Biofrontera Warrants is expected to generate 7.51 times more return on investment than Inspira Technologies. However, Biofrontera Warrants is 7.51 times more volatile than Inspira Technologies Oxy. It trades about 0.14 of its potential returns per unit of risk. Inspira Technologies Oxy is currently generating about 0.08 per unit of risk. If you would invest  20.00  in Biofrontera Warrants on September 25, 2024 and sell it today you would lose (9.00) from holding Biofrontera Warrants or give up 45.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.92%
Values	Daily Returns

Biofrontera Warrants  vs.  Inspira Technologies Oxy

Biofrontera Warrants

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biofrontera Warrants are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Biofrontera Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Inspira Technologies Oxy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inspira Technologies Oxy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Inspira Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biofrontera Warrants and Inspira Technologies

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

The idea behind Biofrontera Warrants and Inspira Technologies Oxy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.