Correlation Between BioPorto and Nanoform Finland

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Can any of the company-specific risk be diversified away by investing in both BioPorto and Nanoform Finland 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 Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Nanoform Finland Plc, you can compare the effects of market volatilities on BioPorto and Nanoform Finland 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 Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Nanoform Finland.

Diversification Opportunities for BioPorto and Nanoform Finland

0.37
  Correlation Coefficient

Weak diversification

The 3 months correlation between BioPorto and Nanoform is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc 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 Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of BioPorto i.e., BioPorto and Nanoform Finland go up and down completely randomly.

Pair Corralation between BioPorto and Nanoform Finland

Assuming the 90 days trading horizon BioPorto is expected to generate 1.01 times more return on investment than Nanoform Finland. However, BioPorto is 1.01 times more volatile than Nanoform Finland Plc. It trades about 0.0 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.03 per unit of risk. If you would invest  238.00  in BioPorto on September 14, 2024 and sell it today you would lose (66.00) from holding BioPorto or give up 27.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.4%
ValuesDaily Returns

BioPorto  vs.  Nanoform Finland Plc

 Performance 
       Timeline  
BioPorto 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days BioPorto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Nanoform Finland Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nanoform Finland Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BioPorto and Nanoform Finland Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BioPorto and Nanoform Finland

The main advantage of trading using opposite BioPorto and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland's long position.
The idea behind BioPorto and Nanoform Finland Plc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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