Correlation Between BICO Group and SBB-B
Can any of the company-specific risk be diversified away by investing in both BICO Group and SBB-B 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 SBB-B 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 Samhllsbyggnadsbolaget i Norden, you can compare the effects of market volatilities on BICO Group and SBB-B 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 SBB-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and SBB-B.
Diversification Opportunities for BICO Group and SBB-B
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BICO and SBB-B is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and Samhllsbyggnadsbolaget i Norde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhllsbyggnadsbolaget 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 SBB-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhllsbyggnadsbolaget has no effect on the direction of BICO Group i.e., BICO Group and SBB-B go up and down completely randomly.
Pair Corralation between BICO Group and SBB-B
Assuming the 90 days trading horizon BICO Group AB is expected to generate 1.12 times more return on investment than SBB-B. However, BICO Group is 1.12 times more volatile than Samhllsbyggnadsbolaget i Norden. It trades about -0.06 of its potential returns per unit of risk. Samhllsbyggnadsbolaget i Norden is currently generating about -0.23 per unit of risk. If you would invest 3,832 in BICO Group AB on August 31, 2024 and sell it today you would lose (470.00) from holding BICO Group AB or give up 12.27% 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. Samhllsbyggnadsbolaget i Norde
Performance |
| Timeline |
| BICO Group AB |
| Samhllsbyggnadsbolaget |
BICO Group and SBB-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and SBB-B
The main advantage of trading using opposite BICO Group and SBB-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, SBB-B 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 SBB-B will offset losses from the drop in SBB-B'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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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