Correlation Between BioPorto and Nexcom AS
Can any of the company-specific risk be diversified away by investing in both BioPorto and Nexcom AS 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 Nexcom AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPorto and Nexcom AS, you can compare the effects of market volatilities on BioPorto and Nexcom AS 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 Nexcom AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPorto and Nexcom AS.
Diversification Opportunities for BioPorto and Nexcom AS
Modest diversification
The 3 months correlation between BioPorto and Nexcom is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BioPorto and Nexcom AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexcom 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 Nexcom AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexcom AS has no effect on the direction of BioPorto i.e., BioPorto and Nexcom AS go up and down completely randomly.
Pair Corralation between BioPorto and Nexcom AS
Assuming the 90 days trading horizon BioPorto is expected to under-perform the Nexcom AS. But the stock apears to be less risky and, when comparing its historical volatility, BioPorto is 4.2 times less risky than Nexcom AS. The stock trades about -0.5 of its potential returns per unit of risk. The Nexcom AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Nexcom AS on September 1, 2024 and sell it today you would lose (36.00) from holding Nexcom AS or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPorto vs. Nexcom AS
Performance |
| Timeline |
| BioPorto |
| Nexcom AS |
BioPorto and Nexcom AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPorto and Nexcom AS
The main advantage of trading using opposite BioPorto and Nexcom AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPorto position performs unexpectedly, Nexcom AS 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 Nexcom AS will offset losses from the drop in Nexcom AS's long position.| BioPorto vs. Novo Nordisk AS | BioPorto vs. AP Mller | BioPorto vs. AP Mller | BioPorto vs. DSV Panalpina AS |
| Nexcom AS vs. FOM Technologies AS | Nexcom AS vs. cBrain AS | Nexcom AS vs. Green Hydrogen Systems | Nexcom AS vs. BioPorto |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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