Correlation Between Bioter SA and Nafpaktos Textile
Can any of the company-specific risk be diversified away by investing in both Bioter SA and Nafpaktos Textile 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 Bioter SA and Nafpaktos Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bioter SA and Nafpaktos Textile Industry, you can compare the effects of market volatilities on Bioter SA and Nafpaktos Textile 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 Bioter SA with a short position of Nafpaktos Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioter SA and Nafpaktos Textile.
Diversification Opportunities for Bioter SA and Nafpaktos Textile
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bioter and Nafpaktos is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bioter SA and Nafpaktos Textile Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafpaktos Textile and Bioter SA 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 Bioter SA are associated (or correlated) with Nafpaktos Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafpaktos Textile has no effect on the direction of Bioter SA i.e., Bioter SA and Nafpaktos Textile go up and down completely randomly.
Pair Corralation between Bioter SA and Nafpaktos Textile
Assuming the 90 days trading horizon Bioter SA is expected to generate 1.6 times more return on investment than Nafpaktos Textile. However, Bioter SA is 1.6 times more volatile than Nafpaktos Textile Industry. It trades about 0.03 of its potential returns per unit of risk. Nafpaktos Textile Industry is currently generating about -0.01 per unit of risk. If you would invest 26.00 in Bioter SA on September 19, 2024 and sell it today you would earn a total of 3.00 from holding Bioter SA or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.86% |
| Values | Daily Returns |
Bioter SA vs. Nafpaktos Textile Industry
Performance |
| Timeline |
| Bioter SA |
| Nafpaktos Textile |
Bioter SA and Nafpaktos Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bioter SA and Nafpaktos Textile
The main advantage of trading using opposite Bioter SA and Nafpaktos Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioter SA position performs unexpectedly, Nafpaktos Textile 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 Nafpaktos Textile will offset losses from the drop in Nafpaktos Textile's long position.| Bioter SA vs. GEK TERNA Holdings | Bioter SA vs. Avax SA | Bioter SA vs. Technical Olympic SA | Bioter SA vs. Ekter SA |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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