Correlation Between BICO Group and GN Store
Can any of the company-specific risk be diversified away by investing in both BICO Group and GN Store 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 BICO Group and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BICO Group AB and GN Store Nord, you can compare the effects of market volatilities on BICO Group and GN Store 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 BICO Group with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and GN Store.
Diversification Opportunities for BICO Group and GN Store
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BICO and GNNDY is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord and BICO 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 BICO Group AB are associated (or correlated) with GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of BICO Group i.e., BICO Group and GN Store go up and down completely randomly.
Pair Corralation between BICO Group and GN Store
Assuming the 90 days horizon BICO Group AB is expected to under-perform the GN Store. In addition to that, BICO Group is 1.62 times more volatile than GN Store Nord. It trades about -0.01 of its total potential returns per unit of risk. GN Store Nord is currently generating about 0.0 per unit of volatility. If you would invest 6,872 in GN Store Nord on August 30, 2024 and sell it today you would lose (1,172) from holding GN Store Nord or give up 17.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BICO Group AB vs. GN Store Nord
Performance |
| Timeline |
| BICO Group AB |
| GN Store Nord |
BICO Group and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and GN Store
The main advantage of trading using opposite BICO Group and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store's long position.| BICO Group vs. Anteris Technologies | BICO Group vs. Brain Scientific | BICO Group vs. Aurora Spine | BICO Group vs. Tenon Medical |
| GN Store vs. Demant AS ADR | GN Store vs. Sonova Holding AG | GN Store vs. GN Store Nord | GN Store vs. Bone Biologics Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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