Correlation Between Disney and BICO Group
Can any of the company-specific risk be diversified away by investing in both Disney and BICO 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 Disney and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and BICO Group AB, you can compare the effects of market volatilities on Disney and BICO 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 Disney with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and BICO Group.
Diversification Opportunities for Disney and BICO Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disney and BICO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and BICO Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICO Group AB and Disney 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 Walt Disney are associated (or correlated) with BICO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICO Group AB has no effect on the direction of Disney i.e., Disney and BICO Group go up and down completely randomly.
Pair Corralation between Disney and BICO Group
Considering the 90-day investment horizon Walt Disney is expected to generate 0.56 times more return on investment than BICO Group. However, Walt Disney is 1.78 times less risky than BICO Group. It trades about 0.08 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.02 per unit of risk. If you would invest 10,230 in Walt Disney on September 1, 2024 and sell it today you would earn a total of 1,517 from holding Walt Disney or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Walt Disney vs. BICO Group AB
Performance |
| Timeline |
| Walt Disney |
| BICO Group AB |
Disney and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and BICO Group
The main advantage of trading using opposite Disney and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, BICO 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 BICO Group will offset losses from the drop in BICO Group's long position.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications Corp |
| BICO Group vs. Anteris Technologies | BICO Group vs. Brain Scientific | BICO Group vs. Aurora Spine | BICO Group vs. Tenon Medical |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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