Correlation Between Biocartis Group and Sequana Medical
Can any of the company-specific risk be diversified away by investing in both Biocartis Group and Sequana Medical 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 Biocartis Group and Sequana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biocartis Group NV and Sequana Medical NV, you can compare the effects of market volatilities on Biocartis Group and Sequana Medical 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 Biocartis Group with a short position of Sequana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biocartis Group and Sequana Medical.
Diversification Opportunities for Biocartis Group and Sequana Medical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biocartis and Sequana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biocartis Group NV and Sequana Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequana Medical NV and Biocartis 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 Biocartis Group NV are associated (or correlated) with Sequana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequana Medical NV has no effect on the direction of Biocartis Group i.e., Biocartis Group and Sequana Medical go up and down completely randomly.
Pair Corralation between Biocartis Group and Sequana Medical
Assuming the 90 days trading horizon Biocartis Group NV is expected to under-perform the Sequana Medical. But the stock apears to be less risky and, when comparing its historical volatility, Biocartis Group NV is 5.62 times less risky than Sequana Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Sequana Medical NV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Sequana Medical NV on November 9, 2024 and sell it today you would lose (388.00) from holding Sequana Medical NV or give up 64.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Biocartis Group NV vs. Sequana Medical NV
Performance |
| Timeline |
| Biocartis Group NV |
| Sequana Medical NV |
Biocartis Group and Sequana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biocartis Group and Sequana Medical
The main advantage of trading using opposite Biocartis Group and Sequana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biocartis Group position performs unexpectedly, Sequana Medical 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 Sequana Medical will offset losses from the drop in Sequana Medical's long position.The idea behind Biocartis Group NV and Sequana Medical NV 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.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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