Correlation Between BICO Group and Boozt AB
Can any of the company-specific risk be diversified away by investing in both BICO Group and Boozt AB 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 Boozt AB 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 Boozt AB, you can compare the effects of market volatilities on BICO Group and Boozt AB 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 Boozt AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and Boozt AB.
Diversification Opportunities for BICO Group and Boozt AB
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BICO and Boozt is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and Boozt AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boozt AB 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 Boozt AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boozt AB has no effect on the direction of BICO Group i.e., BICO Group and Boozt AB go up and down completely randomly.
Pair Corralation between BICO Group and Boozt AB
Assuming the 90 days trading horizon BICO Group AB is expected to under-perform the Boozt AB. In addition to that, BICO Group is 1.72 times more volatile than Boozt AB. It trades about -0.01 of its total potential returns per unit of risk. Boozt AB is currently generating about 0.0 per unit of volatility. If you would invest 13,020 in Boozt AB on October 22, 2024 and sell it today you would lose (1,010) from holding Boozt AB or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
BICO Group AB vs. Boozt AB
Performance |
| Timeline |
| BICO Group AB |
| Boozt AB |
BICO Group and Boozt AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and Boozt AB
The main advantage of trading using opposite BICO Group and Boozt AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, Boozt AB 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 Boozt AB will offset losses from the drop in Boozt AB's long position.| BICO Group vs. Sinch AB | BICO Group vs. Hexatronic Group AB | BICO Group vs. Surgical Science Sweden | BICO Group vs. Embracer Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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