Correlation Between BioInvent International and Alligator Bioscience

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

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

Diversification Opportunities for BioInvent International and Alligator Bioscience

-0.08

Correlation Coefficient

BioInvent International  Alligator Bioscience

Good diversification

The 3 months correlation between BioInvent and Alligator is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Alligator Bioscience AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alligator Bioscience and BioInvent International 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 BioInvent International AB are associated (or correlated) with Alligator Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alligator Bioscience has no effect on the direction of BioInvent International i.e., BioInvent International and Alligator Bioscience go up and down completely randomly.

Pair Corralation between BioInvent International and Alligator Bioscience

Assuming the 90 days trading horizon BioInvent International AB is expected to generate 0.3 times more return on investment than Alligator Bioscience. However, BioInvent International AB is 3.3 times less risky than Alligator Bioscience. It trades about -0.02 of its potential returns per unit of risk. Alligator Bioscience AB is currently generating about -0.19 per unit of risk. If you would invest  4,310  in BioInvent International AB on September 13, 2024 and sell it today you would lose (235.00) from holding BioInvent International AB or give up 5.45% of portfolio value over 90 days.

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

BioInvent International AB  vs.  Alligator Bioscience AB

BioInvent International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioInvent International AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BioInvent International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alligator Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alligator Bioscience AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BioInvent International and Alligator Bioscience

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

The idea behind BioInvent International AB and Alligator Bioscience AB 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.