Correlation Between BioGaia AB and Cloetta AB
Can any of the company-specific risk be diversified away by investing in both BioGaia AB and Cloetta 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 BioGaia AB and Cloetta AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioGaia AB and Cloetta AB, you can compare the effects of market volatilities on BioGaia AB and Cloetta 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 BioGaia AB with a short position of Cloetta AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioGaia AB and Cloetta AB.
Diversification Opportunities for BioGaia AB and Cloetta AB
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BioGaia and Cloetta is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and Cloetta AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloetta AB 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 Cloetta AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloetta AB has no effect on the direction of BioGaia AB i.e., BioGaia AB and Cloetta AB go up and down completely randomly.
Pair Corralation between BioGaia AB and Cloetta AB
Assuming the 90 days trading horizon BioGaia AB is expected to under-perform the Cloetta AB. In addition to that, BioGaia AB is 1.17 times more volatile than Cloetta AB. It trades about -0.08 of its total potential returns per unit of risk. Cloetta AB is currently generating about 0.16 per unit of volatility. If you would invest 1,972 in Cloetta AB on September 1, 2024 and sell it today you would earn a total of 630.00 from holding Cloetta AB or generate 31.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioGaia AB vs. Cloetta AB
Performance |
| Timeline |
| BioGaia AB |
| Cloetta AB |
BioGaia AB and Cloetta AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioGaia AB and Cloetta AB
The main advantage of trading using opposite BioGaia AB and Cloetta AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioGaia AB position performs unexpectedly, Cloetta 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 Cloetta AB will offset losses from the drop in Cloetta AB's long position.The idea behind BioGaia AB and Cloetta AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cloetta AB vs. Securitas AB | Cloetta AB vs. Clas Ohlson AB | Cloetta AB vs. Axfood AB | Cloetta AB vs. Byggmax 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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