Correlation Between Addnode Group and Biotage AB
Can any of the company-specific risk be diversified away by investing in both Addnode Group and Biotage AB 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 Addnode Group and Biotage AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addnode Group AB and Biotage AB, you can compare the effects of market volatilities on Addnode Group and Biotage AB 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 Addnode Group with a short position of Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addnode Group and Biotage AB.
Diversification Opportunities for Addnode Group and Biotage AB
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addnode and Biotage is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and Addnode Group 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 Addnode Group AB are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of Addnode Group i.e., Addnode Group and Biotage AB go up and down completely randomly.
Pair Corralation between Addnode Group and Biotage AB
Assuming the 90 days trading horizon Addnode Group AB is expected to generate 1.01 times more return on investment than Biotage AB. However, Addnode Group is 1.01 times more volatile than Biotage AB. It trades about -0.05 of its potential returns per unit of risk. Biotage AB is currently generating about -0.06 per unit of risk. If you would invest 11,940 in Addnode Group AB on August 31, 2024 and sell it today you would lose (1,890) from holding Addnode Group AB or give up 15.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addnode Group AB vs. Biotage AB
Performance |
| Timeline |
| Addnode Group AB |
| Biotage AB |
Addnode Group and Biotage AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addnode Group and Biotage AB
The main advantage of trading using opposite Addnode Group and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addnode Group position performs unexpectedly, Biotage AB 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 Biotage AB will offset losses from the drop in Biotage AB's long position.| Addnode Group vs. DevPort AB | Addnode Group vs. B3 Consulting Group | Addnode Group vs. Micro Systemation AB |
| Biotage AB vs. CellaVision AB | Biotage AB vs. Vitrolife AB | Biotage AB vs. Sectra AB | Biotage AB vs. BioGaia 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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