Correlation Between Immunovia Publ and BioArctic

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

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

Diversification Opportunities for Immunovia Publ and BioArctic

0.29

Correlation Coefficient

Immunovia Publ  BioArctic

Modest diversification

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

Pair Corralation between Immunovia Publ and BioArctic

Assuming the 90 days trading horizon Immunovia publ AB is expected to generate 2.2 times more return on investment than BioArctic. However, Immunovia Publ is 2.2 times more volatile than BioArctic AB. It trades about 0.04 of its potential returns per unit of risk. BioArctic AB is currently generating about 0.03 per unit of risk. If you would invest  80.00  in Immunovia publ AB on September 12, 2024 and sell it today you would lose (4.00) from holding Immunovia publ AB or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Immunovia publ AB  vs.  BioArctic AB

Immunovia publ AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immunovia publ AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Immunovia Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

BioArctic AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioArctic AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, BioArctic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Immunovia Publ and BioArctic

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

The idea behind Immunovia publ AB and BioArctic 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.