Correlation Between Arctic Gold and Boule Diagnostics
Can any of the company-specific risk be diversified away by investing in both Arctic Gold and Boule Diagnostics 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 Arctic Gold and Boule Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Gold Publ and Boule Diagnostics AB, you can compare the effects of market volatilities on Arctic Gold and Boule Diagnostics 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 Arctic Gold with a short position of Boule Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Gold and Boule Diagnostics.
Diversification Opportunities for Arctic Gold and Boule Diagnostics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arctic and Boule is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Gold Publ and Boule Diagnostics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boule Diagnostics and Arctic Gold 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 Arctic Gold Publ are associated (or correlated) with Boule Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boule Diagnostics has no effect on the direction of Arctic Gold i.e., Arctic Gold and Boule Diagnostics go up and down completely randomly.
Pair Corralation between Arctic Gold and Boule Diagnostics
Assuming the 90 days trading horizon Arctic Gold Publ is expected to generate 1.58 times more return on investment than Boule Diagnostics. However, Arctic Gold is 1.58 times more volatile than Boule Diagnostics AB. It trades about 0.01 of its potential returns per unit of risk. Boule Diagnostics AB is currently generating about -0.04 per unit of risk. If you would invest 30.00 in Arctic Gold Publ on September 1, 2024 and sell it today you would lose (3.00) from holding Arctic Gold Publ or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Arctic Gold Publ vs. Boule Diagnostics AB
Performance |
| Timeline |
| Arctic Gold Publ |
| Boule Diagnostics |
Arctic Gold and Boule Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Gold and Boule Diagnostics
The main advantage of trading using opposite Arctic Gold and Boule Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Gold position performs unexpectedly, Boule Diagnostics 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 Boule Diagnostics will offset losses from the drop in Boule Diagnostics' long position.| Arctic Gold vs. Holmen AB | Arctic Gold vs. Svenska Cellulosa Aktiebolaget | Arctic Gold vs. Husqvarna AB | Arctic Gold vs. Alfa Laval AB |
| Boule Diagnostics vs. Cantargia AB | Boule Diagnostics vs. BioArctic AB | Boule Diagnostics vs. Oncopeptides AB | Boule Diagnostics vs. Hansa Biopharma 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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