Correlation Between ExpreS2ion Biotech and Saniona AB

Can any of the company-specific risk be diversified away by investing in both ExpreS2ion Biotech and Saniona 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 ExpreS2ion Biotech and Saniona AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ExpreS2ion Biotech Holding and Saniona AB, you can compare the effects of market volatilities on ExpreS2ion Biotech and Saniona 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 ExpreS2ion Biotech with a short position of Saniona AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExpreS2ion Biotech and Saniona AB.

Diversification Opportunities for ExpreS2ion Biotech and Saniona AB

0.38

Correlation Coefficient

ExpreS2ion Biotech  Saniona AB

Weak diversification

The 3 months correlation between ExpreS2ion and Saniona is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ExpreS2ion Biotech Holding and Saniona AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saniona AB and ExpreS2ion Biotech 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 ExpreS2ion Biotech Holding are associated (or correlated) with Saniona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saniona AB has no effect on the direction of ExpreS2ion Biotech i.e., ExpreS2ion Biotech and Saniona AB go up and down completely randomly.

Pair Corralation between ExpreS2ion Biotech and Saniona AB

Assuming the 90 days trading horizon ExpreS2ion Biotech Holding is expected to under-perform the Saniona AB. But the stock apears to be less risky and, when comparing its historical volatility, ExpreS2ion Biotech Holding is 1.85 times less risky than Saniona AB. The stock trades about -0.08 of its potential returns per unit of risk. The Saniona AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Saniona AB on September 2, 2024 and sell it today you would earn a total of  280.00  from holding Saniona AB or generate 64.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ExpreS2ion Biotech Holding  vs.  Saniona AB

ExpreS2ion Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExpreS2ion Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Saniona AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExpreS2ion Biotech and Saniona AB

The main advantage of trading using opposite ExpreS2ion Biotech and Saniona AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExpreS2ion Biotech position performs unexpectedly, Saniona 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 Saniona AB will offset losses from the drop in Saniona AB's long position.

The idea behind ExpreS2ion Biotech Holding and Saniona 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.