Correlation Between Bayer AG and Silo Pharma

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

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

Diversification Opportunities for Bayer AG and Silo Pharma

-0.29

Correlation Coefficient

Bayer AG  Silo Pharma

Very good diversification

The 3 months correlation between Bayer and Silo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG PK and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma and Bayer AG 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 Bayer AG PK are associated (or correlated) with Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of Bayer AG i.e., Bayer AG and Silo Pharma go up and down completely randomly.

Pair Corralation between Bayer AG and Silo Pharma

If you would invest  1,686  in Bayer AG PK on June 16, 2024 and sell it today you would earn a total of  0.00  from holding Bayer AG PK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Bayer AG PK  vs.  Silo Pharma

Bayer AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bayer AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bayer AG is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Silo Pharma

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silo Pharma are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Silo Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bayer AG and Silo Pharma

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

The idea behind Bayer AG PK and Silo Pharma 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.