Correlation Between Biofarm Bucure and Digi Communications
Can any of the company-specific risk be diversified away by investing in both Biofarm Bucure and Digi Communications 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 Biofarm Bucure and Digi Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biofarm Bucure and Digi Communications NV, you can compare the effects of market volatilities on Biofarm Bucure and Digi Communications 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 Biofarm Bucure with a short position of Digi Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biofarm Bucure and Digi Communications.
Diversification Opportunities for Biofarm Bucure and Digi Communications
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biofarm and Digi is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Biofarm Bucure and Digi Communications NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi Communications and Biofarm Bucure 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 Biofarm Bucure are associated (or correlated) with Digi Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi Communications has no effect on the direction of Biofarm Bucure i.e., Biofarm Bucure and Digi Communications go up and down completely randomly.
Pair Corralation between Biofarm Bucure and Digi Communications
Assuming the 90 days trading horizon Biofarm Bucure is expected to under-perform the Digi Communications. But the stock apears to be less risky and, when comparing its historical volatility, Biofarm Bucure is 1.53 times less risky than Digi Communications. The stock trades about -0.17 of its potential returns per unit of risk. The Digi Communications NV is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 6,520 in Digi Communications NV on August 28, 2024 and sell it today you would lose (120.00) from holding Digi Communications NV or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biofarm Bucure vs. Digi Communications NV
Performance |
| Timeline |
| Biofarm Bucure |
| Digi Communications |
Biofarm Bucure and Digi Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biofarm Bucure and Digi Communications
The main advantage of trading using opposite Biofarm Bucure and Digi Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biofarm Bucure position performs unexpectedly, Digi Communications 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 Digi Communications will offset losses from the drop in Digi Communications' long position.| Biofarm Bucure vs. Safetech Innovations SA | Biofarm Bucure vs. GRUPUL INDUSTRIAL ELECTROCONTACT | Biofarm Bucure vs. Evergent Investments SA | Biofarm Bucure vs. Patria Bank SA |
| Digi Communications vs. Teraplast Bist | Digi Communications vs. IAR SA | Digi Communications vs. Cemacon Zalau |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |