Correlation Between Arch Biopartners and DBV Technologies

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

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

Diversification Opportunities for Arch Biopartners and DBV Technologies

-0.38

Correlation Coefficient

Arch Biopartners  DBV Technologies

Very good diversification

The 3 months correlation between Arch and DBV is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Arch Biopartners and DBV Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBV Technologies and Arch Biopartners 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 Arch Biopartners are associated (or correlated) with DBV Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBV Technologies has no effect on the direction of Arch Biopartners i.e., Arch Biopartners and DBV Technologies go up and down completely randomly.

Pair Corralation between Arch Biopartners and DBV Technologies

Assuming the 90 days horizon Arch Biopartners is expected to under-perform the DBV Technologies. But the otc stock apears to be less risky and, when comparing its historical volatility, Arch Biopartners is 2.22 times less risky than DBV Technologies. The otc stock trades about -0.06 of its potential returns per unit of risk. The DBV Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  794.00  in DBV Technologies on June 3, 2025 and sell it today you would earn a total of  171.00  from holding DBV Technologies or generate 21.54% return on investment over 90 days.

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

Arch Biopartners  vs.  DBV Technologies

Arch Biopartners

Risk-Adjusted Performance

Weakest

Over the last 90 days Arch Biopartners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

DBV Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in DBV Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, DBV Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arch Biopartners and DBV Technologies

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

The idea behind Arch Biopartners and DBV Technologies 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.