Correlation Between Biotage AB and Scibase AB

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

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

Diversification Opportunities for Biotage AB and Scibase AB

-0.17

Correlation Coefficient

Biotage AB  Scibase AB

Good diversification

The 3 months correlation between Biotage and Scibase is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Biotage AB and Scibase AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scibase AB and Biotage AB 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 Biotage AB are associated (or correlated) with Scibase AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scibase AB has no effect on the direction of Biotage AB i.e., Biotage AB and Scibase AB go up and down completely randomly.

Pair Corralation between Biotage AB and Scibase AB

Assuming the 90 days trading horizon Biotage AB is expected to generate 0.06 times more return on investment than Scibase AB. However, Biotage AB is 15.97 times less risky than Scibase AB. It trades about 0.14 of its potential returns per unit of risk. Scibase AB is currently generating about -0.01 per unit of risk. If you would invest  14,060  in Biotage AB on April 25, 2025 and sell it today you would earn a total of  260.00  from holding Biotage AB or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Biotage AB  vs.  Scibase AB

Biotage AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Biotage AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Biotage AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Scibase AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scibase AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Scibase AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Biotage AB and Scibase AB

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

The idea behind Biotage AB and Scibase 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.