Correlation Between BioInvent International and Freemelt Holding

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

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

Diversification Opportunities for BioInvent International and Freemelt Holding

0.83

Correlation Coefficient

BioInvent International  Freemelt Holding

Very poor diversification

The 3 months correlation between BioInvent and Freemelt is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BioInvent International AB and Freemelt Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freemelt Holding and BioInvent International 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 BioInvent International AB are associated (or correlated) with Freemelt Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freemelt Holding has no effect on the direction of BioInvent International i.e., BioInvent International and Freemelt Holding go up and down completely randomly.

Pair Corralation between BioInvent International and Freemelt Holding

Assuming the 90 days trading horizon BioInvent International is expected to generate 3.09 times less return on investment than Freemelt Holding. But when comparing it to its historical volatility, BioInvent International AB is 1.58 times less risky than Freemelt Holding. It trades about 0.13 of its potential returns per unit of risk. Freemelt Holding AB is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Freemelt Holding AB on April 24, 2025 and sell it today you would earn a total of  161.00  from holding Freemelt Holding AB or generate 159.41% return on investment over 90 days.

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

BioInvent International AB  vs.  Freemelt Holding AB

BioInvent International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioInvent International AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BioInvent International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Freemelt Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Freemelt Holding AB are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Freemelt Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BioInvent International and Freemelt Holding

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

The idea behind BioInvent International AB and Freemelt Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.