Correlation Between Boiron SA and Khiron Life

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

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

Diversification Opportunities for Boiron SA and Khiron Life

0.0

Correlation Coefficient

Boiron SA  Khiron Life

Pay attention - limited upside

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

Pair Corralation between Boiron SA and Khiron Life

Assuming the 90 days horizon Boiron SA is expected to under-perform the Khiron Life. But the stock apears to be less risky and, when comparing its historical volatility, Boiron SA is 2.28 times less risky than Khiron Life. The stock trades about -0.01 of its potential returns per unit of risk. The Khiron Life Sciences is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3.08  in Khiron Life Sciences on September 1, 2024 and sell it today you would lose (0.92) from holding Khiron Life Sciences or give up 29.87% of portfolio value over 90 days.

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

Boiron SA  vs.  Khiron Life Sciences

Boiron SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boiron SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Khiron Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boiron SA and Khiron Life

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

The idea behind Boiron SA and Khiron Life Sciences 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.