Correlation Between EEducation Albert and BICO Group
Can any of the company-specific risk be diversified away by investing in both EEducation Albert and BICO Group 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 EEducation Albert and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eEducation Albert AB and BICO Group AB, you can compare the effects of market volatilities on EEducation Albert and BICO Group 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 EEducation Albert with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEducation Albert and BICO Group.
Diversification Opportunities for EEducation Albert and BICO Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EEducation and BICO is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB and BICO Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICO Group AB and EEducation Albert 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 eEducation Albert AB are associated (or correlated) with BICO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICO Group AB has no effect on the direction of EEducation Albert i.e., EEducation Albert and BICO Group go up and down completely randomly.
Pair Corralation between EEducation Albert and BICO Group
Assuming the 90 days trading horizon eEducation Albert AB is expected to generate 0.55 times more return on investment than BICO Group. However, eEducation Albert AB is 1.82 times less risky than BICO Group. It trades about 0.0 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.04 per unit of risk. If you would invest 372.00 in eEducation Albert AB on September 1, 2024 and sell it today you would lose (13.00) from holding eEducation Albert AB or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
eEducation Albert AB vs. BICO Group AB
Performance |
| Timeline |
| eEducation Albert |
| BICO Group AB |
EEducation Albert and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EEducation Albert and BICO Group
The main advantage of trading using opposite EEducation Albert and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EEducation Albert position performs unexpectedly, BICO Group 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 BICO Group will offset losses from the drop in BICO Group's long position.| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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