Correlation Between BioInvent International and Probi AB

Can any of the company-specific risk be diversified away by investing in both BioInvent International and Probi AB 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 Probi AB 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 Probi AB, you can compare the effects of market volatilities on BioInvent International and Probi AB 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 Probi AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioInvent International and Probi AB.

Diversification Opportunities for BioInvent International and Probi AB

-0.02

Correlation Coefficient

BioInvent International  Probi AB

Good diversification

The 3 months correlation between BioInvent and Probi is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Probi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Probi AB 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 Probi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Probi AB has no effect on the direction of BioInvent International i.e., BioInvent International and Probi AB go up and down completely randomly.

Pair Corralation between BioInvent International and Probi AB

Assuming the 90 days trading horizon BioInvent International is expected to generate 3.39 times less return on investment than Probi AB. But when comparing it to its historical volatility, BioInvent International AB is 1.68 times less risky than Probi AB. It trades about 0.04 of its potential returns per unit of risk. Probi AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  27,600  in Probi AB on September 2, 2024 and sell it today you would earn a total of  7,100  from holding Probi AB or generate 25.72% return on investment over 90 days.

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

BioInvent International AB  vs.  Probi AB

BioInvent International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BioInvent International AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BioInvent International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Probi AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Probi AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Probi AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioInvent International and Probi AB

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

The idea behind BioInvent International AB and Probi 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.