Correlation Between BioGaia AB and Alligator Bioscience
Can any of the company-specific risk be diversified away by investing in both BioGaia AB and Alligator Bioscience 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 BioGaia AB and Alligator Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioGaia AB and Alligator Bioscience AB, you can compare the effects of market volatilities on BioGaia AB and Alligator Bioscience 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 BioGaia AB with a short position of Alligator Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioGaia AB and Alligator Bioscience.
Diversification Opportunities for BioGaia AB and Alligator Bioscience
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BioGaia and Alligator is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and Alligator Bioscience AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alligator Bioscience and BioGaia AB 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 BioGaia AB are associated (or correlated) with Alligator Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alligator Bioscience has no effect on the direction of BioGaia AB i.e., BioGaia AB and Alligator Bioscience go up and down completely randomly.
Pair Corralation between BioGaia AB and Alligator Bioscience
Assuming the 90 days trading horizon BioGaia AB is expected to generate 13.72 times less return on investment than Alligator Bioscience. But when comparing it to its historical volatility, BioGaia AB is 41.33 times less risky than Alligator Bioscience. It trades about 0.31 of its potential returns per unit of risk. Alligator Bioscience AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Alligator Bioscience AB on November 7, 2024 and sell it today you would lose (19.96) from holding Alligator Bioscience AB or give up 83.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioGaia AB vs. Alligator Bioscience AB
Performance |
| Timeline |
| BioGaia AB |
| Alligator Bioscience |
BioGaia AB and Alligator Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioGaia AB and Alligator Bioscience
The main advantage of trading using opposite BioGaia AB and Alligator Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioGaia AB position performs unexpectedly, Alligator Bioscience 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 Alligator Bioscience will offset losses from the drop in Alligator Bioscience's long position.| BioGaia AB vs. Biotage AB | BioGaia AB vs. CellaVision AB | BioGaia AB vs. Sectra AB | BioGaia AB vs. Elekta AB |
| Alligator Bioscience vs. Cantargia AB | Alligator Bioscience vs. BioArctic AB | Alligator Bioscience vs. Oncopeptides AB | Alligator Bioscience vs. Hansa Biopharma 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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