Correlation Between XSpray Pharma and BioGaia AB

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

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

Diversification Opportunities for XSpray Pharma and BioGaia AB

-0.24

Correlation Coefficient

XSpray Pharma  BioGaia AB

Very good diversification

The 3 months correlation between XSpray and BioGaia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding XSpray Pharma AB and BioGaia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioGaia AB and XSpray 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 XSpray Pharma AB are associated (or correlated) with BioGaia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioGaia AB has no effect on the direction of XSpray Pharma i.e., XSpray Pharma and BioGaia AB go up and down completely randomly.

Pair Corralation between XSpray Pharma and BioGaia AB

Assuming the 90 days trading horizon XSpray Pharma AB is expected to generate 2.46 times more return on investment than BioGaia AB. However, XSpray Pharma is 2.46 times more volatile than BioGaia AB. It trades about -0.01 of its potential returns per unit of risk. BioGaia AB is currently generating about -0.07 per unit of risk. If you would invest  4,700  in XSpray Pharma AB on September 13, 2024 and sell it today you would lose (255.00) from holding XSpray Pharma AB or give up 5.43% of portfolio value over 90 days.

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

XSpray Pharma AB  vs.  BioGaia AB

XSpray Pharma AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XSpray Pharma AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, XSpray Pharma is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

BioGaia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioGaia AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with XSpray Pharma and BioGaia AB

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

The idea behind XSpray Pharma AB and BioGaia 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.