Correlation Between BICO Group and ADDvise Group
Can any of the company-specific risk be diversified away by investing in both BICO Group and ADDvise Group 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 ADDvise Group 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 ADDvise Group B, you can compare the effects of market volatilities on BICO Group and ADDvise Group 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 ADDvise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and ADDvise Group.
Diversification Opportunities for BICO Group and ADDvise Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BICO and ADDvise is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and ADDvise Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADDvise Group B 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 ADDvise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADDvise Group B has no effect on the direction of BICO Group i.e., BICO Group and ADDvise Group go up and down completely randomly.
Pair Corralation between BICO Group and ADDvise Group
Assuming the 90 days trading horizon BICO Group AB is expected to generate 1.19 times more return on investment than ADDvise Group. However, BICO Group is 1.19 times more volatile than ADDvise Group B. It trades about -0.08 of its potential returns per unit of risk. ADDvise Group B is currently generating about -0.16 per unit of risk. If you would invest 3,832 in BICO Group AB on September 1, 2024 and sell it today you would lose (566.00) from holding BICO Group AB or give up 14.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BICO Group AB vs. ADDvise Group B
Performance |
| Timeline |
| BICO Group AB |
| ADDvise Group B |
BICO Group and ADDvise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and ADDvise Group
The main advantage of trading using opposite BICO Group and ADDvise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, ADDvise Group 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 ADDvise Group will offset losses from the drop in ADDvise Group's long position.| BICO Group vs. Xvivo Perfusion AB | BICO Group vs. Bactiguard Holding AB | BICO Group vs. Stille AB | BICO Group vs. SpectraCure AB |
| ADDvise Group vs. Xvivo Perfusion AB | ADDvise Group vs. BICO Group AB | ADDvise Group vs. Bactiguard Holding AB | ADDvise Group vs. Stille 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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