Correlation Between Hansa Biopharma and Swedish Orphan

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

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

Diversification Opportunities for Hansa Biopharma and Swedish Orphan

-0.35

Correlation Coefficient

Hansa Biopharma  Swedish Orphan

Very good diversification

The 3 months correlation between Hansa and Swedish is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Biopharma AB and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum and Hansa Biopharma 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 Hansa Biopharma AB are associated (or correlated) with Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of Hansa Biopharma i.e., Hansa Biopharma and Swedish Orphan go up and down completely randomly.

Pair Corralation between Hansa Biopharma and Swedish Orphan

Assuming the 90 days trading horizon Hansa Biopharma AB is expected to generate 1.35 times more return on investment than Swedish Orphan. However, Hansa Biopharma is 1.35 times more volatile than Swedish Orphan Biovitrum. It trades about 0.04 of its potential returns per unit of risk. Swedish Orphan Biovitrum is currently generating about -0.08 per unit of risk. If you would invest  2,740  in Hansa Biopharma AB on May 5, 2025 and sell it today you would earn a total of  108.00  from holding Hansa Biopharma AB or generate 3.94% return on investment over 90 days.

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

Hansa Biopharma AB  vs.  Swedish Orphan Biovitrum

Hansa Biopharma AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Biopharma AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansa Biopharma may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hansa Biopharma and Swedish Orphan

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

The idea behind Hansa Biopharma AB and Swedish Orphan Biovitrum 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..