Correlation Between Broedrene and Bactiquant
Can any of the company-specific risk be diversified away by investing in both Broedrene and Bactiquant 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 Broedrene and Bactiquant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broedrene AO Johansen and Bactiquant AS, you can compare the effects of market volatilities on Broedrene and Bactiquant 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 Broedrene with a short position of Bactiquant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broedrene and Bactiquant.
Diversification Opportunities for Broedrene and Bactiquant
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Broedrene and Bactiquant is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Broedrene AO Johansen and Bactiquant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiquant AS and Broedrene 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 Broedrene AO Johansen are associated (or correlated) with Bactiquant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiquant AS has no effect on the direction of Broedrene i.e., Broedrene and Bactiquant go up and down completely randomly.
Pair Corralation between Broedrene and Bactiquant
Assuming the 90 days trading horizon Broedrene is expected to generate 17.2 times less return on investment than Bactiquant. But when comparing it to its historical volatility, Broedrene AO Johansen is 4.79 times less risky than Bactiquant. It trades about 0.0 of its potential returns per unit of risk. Bactiquant AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 721.00 in Bactiquant AS on November 27, 2024 and sell it today you would lose (379.00) from holding Bactiquant AS or give up 52.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broedrene AO Johansen vs. Bactiquant AS
Performance |
| Timeline |
| Broedrene AO Johansen |
| Bactiquant AS |
Broedrene and Bactiquant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broedrene and Bactiquant
The main advantage of trading using opposite Broedrene and Bactiquant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broedrene position performs unexpectedly, Bactiquant 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 Bactiquant will offset losses from the drop in Bactiquant's long position.| Broedrene vs. North Media AS | Broedrene vs. Solar AS | Broedrene vs. Per Aarsleff Holding | Broedrene vs. HusCompagniet AS |
| Bactiquant vs. NTG Nordic Transport | Bactiquant vs. Moens Bank AS | Bactiquant vs. PARKEN Sport Entertainment | Bactiquant vs. North Media AS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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