Correlation Between Bonzun AB and Physitrack PLC
Can any of the company-specific risk be diversified away by investing in both Bonzun AB and Physitrack PLC 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 Bonzun AB and Physitrack PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonzun AB and Physitrack PLC, you can compare the effects of market volatilities on Bonzun AB and Physitrack PLC 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 Bonzun AB with a short position of Physitrack PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonzun AB and Physitrack PLC.
Diversification Opportunities for Bonzun AB and Physitrack PLC
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bonzun and Physitrack is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bonzun AB and Physitrack PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Physitrack PLC and Bonzun AB 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 Bonzun AB are associated (or correlated) with Physitrack PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Physitrack PLC has no effect on the direction of Bonzun AB i.e., Bonzun AB and Physitrack PLC go up and down completely randomly.
Pair Corralation between Bonzun AB and Physitrack PLC
Assuming the 90 days trading horizon Bonzun AB is expected to under-perform the Physitrack PLC. In addition to that, Bonzun AB is 2.93 times more volatile than Physitrack PLC. It trades about -0.02 of its total potential returns per unit of risk. Physitrack PLC is currently generating about -0.04 per unit of volatility. If you would invest 1,520 in Physitrack PLC on August 29, 2024 and sell it today you would lose (706.00) from holding Physitrack PLC or give up 46.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonzun AB vs. Physitrack PLC
Performance |
| Timeline |
| Bonzun AB |
| Physitrack PLC |
Bonzun AB and Physitrack PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonzun AB and Physitrack PLC
The main advantage of trading using opposite Bonzun AB and Physitrack PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonzun AB position performs unexpectedly, Physitrack PLC 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 Physitrack PLC will offset losses from the drop in Physitrack PLC's long position.| Bonzun AB vs. Enersize Oy | Bonzun AB vs. Diagonal Bio AB | Bonzun AB vs. NetJobs Group AB | Bonzun AB vs. Clean Motion AB |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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