Correlation Between BioGaia AB and Stille AB
Can any of the company-specific risk be diversified away by investing in both BioGaia AB and Stille 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 Stille 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 Stille AB, you can compare the effects of market volatilities on BioGaia AB and Stille 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 Stille AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioGaia AB and Stille AB.
Diversification Opportunities for BioGaia AB and Stille AB
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BioGaia and Stille is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and Stille AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stille 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 Stille AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stille AB has no effect on the direction of BioGaia AB i.e., BioGaia AB and Stille AB go up and down completely randomly.
Pair Corralation between BioGaia AB and Stille AB
Assuming the 90 days trading horizon BioGaia AB is expected to generate 5.97 times less return on investment than Stille AB. But when comparing it to its historical volatility, BioGaia AB is 1.15 times less risky than Stille AB. It trades about 0.01 of its potential returns per unit of risk. Stille AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,368 in Stille AB on August 26, 2024 and sell it today you would earn a total of 8,932 from holding Stille AB or generate 78.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioGaia AB vs. Stille AB
Performance |
| Timeline |
| BioGaia AB |
| Stille AB |
BioGaia AB and Stille AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioGaia AB and Stille AB
The main advantage of trading using opposite BioGaia AB and Stille AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioGaia AB position performs unexpectedly, Stille 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 Stille AB will offset losses from the drop in Stille AB's long position.The idea behind BioGaia AB and Stille 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.| Stille AB vs. Xvivo Perfusion AB | Stille AB vs. BICO Group AB | Stille AB vs. Mentice AB | Stille AB vs. SpectraCure 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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