Correlation Between Vicore Pharma and BioArctic

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

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

Diversification Opportunities for Vicore Pharma and BioArctic

0.07

Correlation Coefficient

Vicore Pharma  BioArctic

Significant diversification

The 3 months correlation between Vicore and BioArctic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Vicore Pharma Holding and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Vicore Pharma 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 Vicore Pharma Holding 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 Vicore Pharma i.e., Vicore Pharma and BioArctic go up and down completely randomly.

Pair Corralation between Vicore Pharma and BioArctic

Assuming the 90 days trading horizon Vicore Pharma Holding is expected to under-perform the BioArctic. In addition to that, Vicore Pharma is 1.43 times more volatile than BioArctic AB. It trades about -0.12 of its total potential returns per unit of risk. BioArctic AB is currently generating about 0.07 per unit of volatility. If you would invest  16,410  in BioArctic AB on September 2, 2024 and sell it today you would earn a total of  2,900  from holding BioArctic AB or generate 17.67% return on investment over 90 days.

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

Vicore Pharma Holding  vs.  BioArctic AB

Vicore Pharma Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vicore Pharma Holding 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.

BioArctic AB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BioArctic AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, BioArctic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vicore Pharma and BioArctic

The main advantage of trading using opposite Vicore Pharma and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicore Pharma 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 Vicore Pharma Holding 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.