Correlation Between Bio Works and Swedencare Publ
Can any of the company-specific risk be diversified away by investing in both Bio Works and Swedencare Publ 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 Bio Works and Swedencare Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Works Technologies AB and Swedencare publ AB, you can compare the effects of market volatilities on Bio Works and Swedencare Publ 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 Bio Works with a short position of Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Works and Swedencare Publ.
Diversification Opportunities for Bio Works and Swedencare Publ
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bio and Swedencare is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bio Works Technologies AB and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ AB and Bio Works 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 Bio Works Technologies AB are associated (or correlated) with Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of Bio Works i.e., Bio Works and Swedencare Publ go up and down completely randomly.
Pair Corralation between Bio Works and Swedencare Publ
Assuming the 90 days trading horizon Bio Works Technologies AB is expected to under-perform the Swedencare Publ. In addition to that, Bio Works is 2.78 times more volatile than Swedencare publ AB. It trades about -0.07 of its total potential returns per unit of risk. Swedencare publ AB is currently generating about -0.02 per unit of volatility. If you would invest 6,228 in Swedencare publ AB on November 3, 2024 and sell it today you would lose (1,208) from holding Swedencare publ AB or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Works Technologies AB vs. Swedencare publ AB
Performance |
| Timeline |
| Bio Works Technologies |
| Swedencare publ AB |
Bio Works and Swedencare Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Works and Swedencare Publ
The main advantage of trading using opposite Bio Works and Swedencare Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Works position performs unexpectedly, Swedencare Publ 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 Swedencare Publ will offset losses from the drop in Swedencare Publ's long position.The idea behind Bio Works Technologies AB and Swedencare publ 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.| Swedencare Publ vs. Upsales Technology AB | Swedencare Publ vs. Nordic Asia Investment | Swedencare Publ vs. USWE Sports AB | Swedencare Publ vs. Indutrade 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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