Correlation Between BIO UV and Prodways Group
Can any of the company-specific risk be diversified away by investing in both BIO UV and Prodways 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 BIO UV and Prodways Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIO UV Group and Prodways Group SA, you can compare the effects of market volatilities on BIO UV and Prodways 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 BIO UV with a short position of Prodways Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO UV and Prodways Group.
Diversification Opportunities for BIO UV and Prodways Group
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BIO and Prodways is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding BIO UV Group and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA and BIO UV 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 BIO UV Group are associated (or correlated) with Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of BIO UV i.e., BIO UV and Prodways Group go up and down completely randomly.
Pair Corralation between BIO UV and Prodways Group
Assuming the 90 days trading horizon BIO UV Group is expected to under-perform the Prodways Group. In addition to that, BIO UV is 2.25 times more volatile than Prodways Group SA. It trades about -0.15 of its total potential returns per unit of risk. Prodways Group SA is currently generating about -0.27 per unit of volatility. If you would invest 52.00 in Prodways Group SA on September 1, 2024 and sell it today you would lose (4.00) from holding Prodways Group SA or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO UV Group vs. Prodways Group SA
Performance |
| Timeline |
| BIO UV Group |
| Prodways Group SA |
BIO UV and Prodways Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO UV and Prodways Group
The main advantage of trading using opposite BIO UV and Prodways Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO UV position performs unexpectedly, Prodways 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 Prodways Group will offset losses from the drop in Prodways Group's long position.The idea behind BIO UV Group and Prodways Group SA 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.| Prodways Group vs. Balyo SA | Prodways Group vs. Lumibird SA | Prodways Group vs. Chargeurs SA | Prodways Group vs. Figeac Aero SA |
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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