Correlation Between BICO Group and Xvivo Perfusion
Can any of the company-specific risk be diversified away by investing in both BICO Group and Xvivo Perfusion 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 Xvivo Perfusion 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 Xvivo Perfusion AB, you can compare the effects of market volatilities on BICO Group and Xvivo Perfusion 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 Xvivo Perfusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICO Group and Xvivo Perfusion.
Diversification Opportunities for BICO Group and Xvivo Perfusion
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BICO and Xvivo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BICO Group AB and Xvivo Perfusion AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xvivo Perfusion 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 Xvivo Perfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xvivo Perfusion AB has no effect on the direction of BICO Group i.e., BICO Group and Xvivo Perfusion go up and down completely randomly.
Pair Corralation between BICO Group and Xvivo Perfusion
Assuming the 90 days trading horizon BICO Group AB is expected to under-perform the Xvivo Perfusion. In addition to that, BICO Group is 1.88 times more volatile than Xvivo Perfusion AB. It trades about -0.21 of its total potential returns per unit of risk. Xvivo Perfusion AB is currently generating about -0.11 per unit of volatility. If you would invest 51,100 in Xvivo Perfusion AB on August 29, 2024 and sell it today you would lose (5,350) from holding Xvivo Perfusion AB or give up 10.47% 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. Xvivo Perfusion AB
Performance |
| Timeline |
| BICO Group AB |
| Xvivo Perfusion AB |
BICO Group and Xvivo Perfusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BICO Group and Xvivo Perfusion
The main advantage of trading using opposite BICO Group and Xvivo Perfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICO Group position performs unexpectedly, Xvivo Perfusion 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 Xvivo Perfusion will offset losses from the drop in Xvivo Perfusion's long position.| BICO Group vs. KABE Group AB | BICO Group vs. IAR Systems Group | BICO Group vs. Mekonomen AB | BICO Group vs. Clinical Laserthermia Systems |
| Xvivo Perfusion vs. Vitrolife AB | Xvivo Perfusion vs. BioArctic AB | Xvivo Perfusion vs. CellaVision AB | Xvivo Perfusion vs. Invisio Communications 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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