Correlation Between BICO Group and Senzime AB
Can any of the company-specific risk be diversified away by investing in both BICO Group and Senzime 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 Senzime 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 Senzime AB, you can compare the effects of market volatilities on BICO Group and Senzime 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 Senzime AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and Senzime AB.
Diversification Opportunities for BICO Group and Senzime AB
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BICO and Senzime is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and Senzime AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senzime 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 Senzime AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senzime AB has no effect on the direction of BICO Group i.e., BICO Group and Senzime AB go up and down completely randomly.
Pair Corralation between BICO Group and Senzime AB
Assuming the 90 days trading horizon BICO Group AB is expected to under-perform the Senzime AB. But the stock apears to be less risky and, when comparing its historical volatility, BICO Group AB is 1.13 times less risky than Senzime AB. The stock trades about -0.11 of its potential returns per unit of risk. The Senzime AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 615.00 in Senzime AB on August 25, 2024 and sell it today you would lose (44.00) from holding Senzime AB or give up 7.15% 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. Senzime AB
Performance |
| Timeline |
| BICO Group AB |
| Senzime AB |
BICO Group and Senzime AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and Senzime AB
The main advantage of trading using opposite BICO Group and Senzime AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, Senzime 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 Senzime AB will offset losses from the drop in Senzime AB's long position.| BICO Group vs. Xvivo Perfusion AB | BICO Group vs. Mentice AB | BICO Group vs. SpectraCure AB | BICO Group vs. Senzime 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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