Correlation Between Swedish Orphan and Alligator Bioscience

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

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

Diversification Opportunities for Swedish Orphan and Alligator Bioscience

-0.66

Correlation Coefficient

Swedish Orphan  Alligator Bioscience

Excellent diversification

The 3 months correlation between Swedish and Alligator is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Swedish Orphan Biovitrum and Alligator Bioscience AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alligator Bioscience and Swedish Orphan 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 Swedish Orphan Biovitrum are associated (or correlated) with Alligator Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alligator Bioscience has no effect on the direction of Swedish Orphan i.e., Swedish Orphan and Alligator Bioscience go up and down completely randomly.

Pair Corralation between Swedish Orphan and Alligator Bioscience

Assuming the 90 days trading horizon Swedish Orphan Biovitrum is expected to under-perform the Alligator Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, Swedish Orphan Biovitrum is 3.4 times less risky than Alligator Bioscience. The stock trades about -0.01 of its potential returns per unit of risk. The Alligator Bioscience AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  527.00  in Alligator Bioscience AB on April 23, 2025 and sell it today you would earn a total of  25.00  from holding Alligator Bioscience AB or generate 4.74% return on investment over 90 days.

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

Swedish Orphan Biovitrum  vs.  Alligator Bioscience AB

Swedish Orphan Biovitrum

Risk-Adjusted Performance

Very Weak

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

Alligator Bioscience

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alligator Bioscience AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alligator Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swedish Orphan and Alligator Bioscience

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

The idea behind Swedish Orphan Biovitrum and Alligator Bioscience 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.