Correlation Between BioGaia AB and Sectra AB
Can any of the company-specific risk be diversified away by investing in both BioGaia AB and Sectra 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 Sectra 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 Sectra AB, you can compare the effects of market volatilities on BioGaia AB and Sectra 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 Sectra AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioGaia AB and Sectra AB.
Diversification Opportunities for BioGaia AB and Sectra AB
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioGaia and Sectra is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and Sectra AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sectra 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 Sectra AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sectra AB has no effect on the direction of BioGaia AB i.e., BioGaia AB and Sectra AB go up and down completely randomly.
Pair Corralation between BioGaia AB and Sectra AB
Assuming the 90 days trading horizon BioGaia AB is expected to generate 0.9 times more return on investment than Sectra AB. However, BioGaia AB is 1.11 times less risky than Sectra AB. It trades about 0.22 of its potential returns per unit of risk. Sectra AB is currently generating about -0.29 per unit of risk. If you would invest 11,020 in BioGaia AB on October 23, 2024 and sell it today you would earn a total of 670.00 from holding BioGaia AB or generate 6.08% 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. Sectra AB
Performance |
| Timeline |
| BioGaia AB |
| Sectra AB |
BioGaia AB and Sectra AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioGaia AB and Sectra AB
The main advantage of trading using opposite BioGaia AB and Sectra AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioGaia AB position performs unexpectedly, Sectra 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 Sectra AB will offset losses from the drop in Sectra AB's long position.| BioGaia AB vs. Biotage AB | BioGaia AB vs. CellaVision AB | BioGaia AB vs. Sectra AB | BioGaia AB vs. Elekta AB |
| Sectra AB vs. Vitrolife AB | Sectra AB vs. Beijer Ref AB | Sectra AB vs. Biotage AB | Sectra AB vs. CellaVision 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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