Correlation Between Burkhalter Holding and BB Biotech

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

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

Diversification Opportunities for Burkhalter Holding and BB Biotech

0.85

Correlation Coefficient

Burkhalter Holding  BB Biotech

Very poor diversification

The 3 months correlation between Burkhalter and BION is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Burkhalter Holding AG and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and Burkhalter Holding 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 Burkhalter Holding AG are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of Burkhalter Holding i.e., Burkhalter Holding and BB Biotech go up and down completely randomly.

Pair Corralation between Burkhalter Holding and BB Biotech

Assuming the 90 days trading horizon Burkhalter Holding AG is expected to generate 0.68 times more return on investment than BB Biotech. However, Burkhalter Holding AG is 1.47 times less risky than BB Biotech. It trades about 0.24 of its potential returns per unit of risk. BB Biotech AG is currently generating about 0.13 per unit of risk. If you would invest  11,948  in Burkhalter Holding AG on April 25, 2025 and sell it today you would earn a total of  1,892  from holding Burkhalter Holding AG or generate 15.84% return on investment over 90 days.

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

Burkhalter Holding AG  vs.  BB Biotech AG

Burkhalter Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Burkhalter Holding AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Burkhalter Holding showed solid returns over the last few months and may actually be approaching a breakup point.

BB Biotech AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BB Biotech AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, BB Biotech may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Burkhalter Holding and BB Biotech

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

The idea behind Burkhalter Holding AG and BB Biotech AG 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.