Correlation Between C Rad and Bio Works
Can any of the company-specific risk be diversified away by investing in both C Rad and Bio Works 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 C Rad and Bio Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Rad AB and Bio Works Technologies AB, you can compare the effects of market volatilities on C Rad and Bio Works 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 C Rad with a short position of Bio Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Rad and Bio Works.
Diversification Opportunities for C Rad and Bio Works
Poor diversification
The 3 months correlation between CRAD-B and Bio is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding C Rad AB and Bio Works Technologies AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Works Technologies and C Rad 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 C Rad AB are associated (or correlated) with Bio Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Works Technologies has no effect on the direction of C Rad i.e., C Rad and Bio Works go up and down completely randomly.
Pair Corralation between C Rad and Bio Works
Assuming the 90 days trading horizon C Rad is expected to generate 3.13 times less return on investment than Bio Works. But when comparing it to its historical volatility, C Rad AB is 2.44 times less risky than Bio Works. It trades about 0.07 of its potential returns per unit of risk. Bio Works Technologies AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Bio Works Technologies AB on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Bio Works Technologies AB or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Rad AB vs. Bio Works Technologies AB
Performance |
| Timeline |
| C Rad AB |
| Bio Works Technologies |
C Rad and Bio Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Rad and Bio Works
The main advantage of trading using opposite C Rad and Bio Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Rad position performs unexpectedly, Bio Works 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 Bio Works will offset losses from the drop in Bio Works' long position.| C Rad vs. CellaVision AB | C Rad vs. Biotage AB | C Rad vs. Boule Diagnostics AB | C Rad vs. RaySearch Laboratories AB |
| Bio Works vs. Simris Alg AB | Bio Works vs. Immunovia publ AB | Bio Works vs. Sedana Medical AB | Bio Works vs. KABE Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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