Correlation Between BioPorto and Conferize
Can any of the company-specific risk be diversified away by investing in both BioPorto and Conferize 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 BioPorto and Conferize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Conferize AS, you can compare the effects of market volatilities on BioPorto and Conferize 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 BioPorto with a short position of Conferize. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Conferize.
Diversification Opportunities for BioPorto and Conferize
Excellent diversification
The 3 months correlation between BioPorto and Conferize is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Conferize AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conferize AS and BioPorto 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 BioPorto are associated (or correlated) with Conferize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conferize AS has no effect on the direction of BioPorto i.e., BioPorto and Conferize go up and down completely randomly.
Pair Corralation between BioPorto and Conferize
Assuming the 90 days trading horizon BioPorto is expected to generate 0.19 times more return on investment than Conferize. However, BioPorto is 5.4 times less risky than Conferize. It trades about -0.03 of its potential returns per unit of risk. Conferize AS is currently generating about -0.06 per unit of risk. If you would invest 153.00 in BioPorto on November 27, 2024 and sell it today you would lose (2.00) from holding BioPorto or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. Conferize AS
Performance |
| Timeline |
| BioPorto |
| Conferize AS |
BioPorto and Conferize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and Conferize
The main advantage of trading using opposite BioPorto and Conferize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Conferize 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 Conferize will offset losses from the drop in Conferize's long position.The idea behind BioPorto and Conferize AS 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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