Correlation Between BICO Group and Implantica

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Can any of the company-specific risk be diversified away by investing in both BICO Group and Implantica 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 Implantica 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 Implantica AG, you can compare the effects of market volatilities on BICO Group and Implantica 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 Implantica. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and Implantica.

Diversification Opportunities for BICO Group and Implantica

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between BICO and Implantica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and Implantica AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implantica AG 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 Implantica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implantica AG has no effect on the direction of BICO Group i.e., BICO Group and Implantica go up and down completely randomly.

Pair Corralation between BICO Group and Implantica

Assuming the 90 days trading horizon BICO Group AB is expected to generate 1.47 times more return on investment than Implantica. However, BICO Group is 1.47 times more volatile than Implantica AG. It trades about 0.08 of its potential returns per unit of risk. Implantica AG is currently generating about -0.01 per unit of risk. If you would invest  3,446  in BICO Group AB on November 27, 2024 and sell it today you would earn a total of  556.00  from holding BICO Group AB or generate 16.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BICO Group AB  vs.  Implantica AG

 Performance 
       Timeline  
BICO Group AB 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in BICO Group AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BICO Group unveiled solid returns over the last few months and may actually be approaching a breakup point.
Implantica AG 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Implantica AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Implantica is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BICO Group and Implantica Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BICO Group and Implantica

The main advantage of trading using opposite BICO Group and Implantica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, Implantica 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 Implantica will offset losses from the drop in Implantica's long position.
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The idea behind BICO Group AB and Implantica AG 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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