Correlation Between ALM Equity and BioArctic
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By analyzing existing cross correlation between ALM Equity AB and BioArctic AB, you can compare the effects of market volatilities on ALM Equity and BioArctic 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 ALM Equity with a short position of BioArctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Equity and BioArctic.
Diversification Opportunities for ALM Equity and BioArctic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ALM and BioArctic is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ALM Equity AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and ALM Equity 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 ALM Equity AB are associated (or correlated) with BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of ALM Equity i.e., ALM Equity and BioArctic go up and down completely randomly.
Pair Corralation between ALM Equity and BioArctic
Assuming the 90 days trading horizon ALM Equity AB is expected to under-perform the BioArctic. But the stock apears to be less risky and, when comparing its historical volatility, ALM Equity AB is 10.23 times less risky than BioArctic. The stock trades about -0.18 of its potential returns per unit of risk. The BioArctic AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15,850 in BioArctic AB on August 30, 2024 and sell it today you would earn a total of 2,900 from holding BioArctic AB or generate 18.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
ALM Equity AB vs. BioArctic AB
Performance |
| Timeline |
| ALM Equity AB |
| BioArctic AB |
ALM Equity and BioArctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALM Equity and BioArctic
The main advantage of trading using opposite ALM Equity and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Equity position performs unexpectedly, BioArctic 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 BioArctic will offset losses from the drop in BioArctic's long position.| ALM Equity vs. KABE Group AB | ALM Equity vs. IAR Systems Group | ALM Equity vs. Mekonomen AB | ALM Equity vs. Clinical Laserthermia Systems |
| BioArctic vs. Oncopeptides AB | BioArctic vs. Camurus AB | BioArctic vs. Hansa Biopharma AB | BioArctic vs. Cantargia AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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