Correlation Between Bpost NV and Biocartis Group
Can any of the company-specific risk be diversified away by investing in both Bpost NV and Biocartis Group 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 Bpost NV and Biocartis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bpost NV and Biocartis Group NV, you can compare the effects of market volatilities on Bpost NV and Biocartis Group 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 Bpost NV with a short position of Biocartis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bpost NV and Biocartis Group.
Diversification Opportunities for Bpost NV and Biocartis Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bpost and Biocartis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and Biocartis Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocartis Group NV and Bpost NV 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 Bpost NV are associated (or correlated) with Biocartis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocartis Group NV has no effect on the direction of Bpost NV i.e., Bpost NV and Biocartis Group go up and down completely randomly.
Pair Corralation between Bpost NV and Biocartis Group
Assuming the 90 days trading horizon Bpost NV is expected to under-perform the Biocartis Group. In addition to that, Bpost NV is 1.08 times more volatile than Biocartis Group NV. It trades about -0.07 of its total potential returns per unit of risk. Biocartis Group NV is currently generating about -0.06 per unit of volatility. If you would invest 62.00 in Biocartis Group NV on August 30, 2024 and sell it today you would lose (33.00) from holding Biocartis Group NV or give up 53.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bpost NV vs. Biocartis Group NV
Performance |
| Timeline |
| Bpost NV |
| Biocartis Group NV |
Bpost NV and Biocartis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bpost NV and Biocartis Group
The main advantage of trading using opposite Bpost NV and Biocartis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bpost NV position performs unexpectedly, Biocartis Group 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 Biocartis Group will offset losses from the drop in Biocartis Group's long position.The idea behind Bpost NV and Biocartis Group NV 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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