Correlation Between Episurf Medical and BICO Group
Can any of the company-specific risk be diversified away by investing in both Episurf Medical 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 Episurf Medical and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Episurf Medical AB and BICO Group AB, you can compare the effects of market volatilities on Episurf Medical 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 Episurf Medical with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episurf Medical and BICO Group.
Diversification Opportunities for Episurf Medical and BICO Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Episurf and BICO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB 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 Episurf Medical 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 Episurf Medical AB 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 Episurf Medical i.e., Episurf Medical and BICO Group go up and down completely randomly.
Pair Corralation between Episurf Medical and BICO Group
Assuming the 90 days trading horizon Episurf Medical AB is expected to under-perform the BICO Group. In addition to that, Episurf Medical is 1.18 times more volatile than BICO Group AB. It trades about -0.11 of its total potential returns per unit of risk. BICO Group AB is currently generating about -0.03 per unit of volatility. If you would invest 4,530 in BICO Group AB on September 3, 2024 and sell it today you would lose (1,264) from holding BICO Group AB or give up 27.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Episurf Medical AB vs. BICO Group AB
Performance |
| Timeline |
| Episurf Medical AB |
| BICO Group AB |
Episurf Medical and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Episurf Medical and BICO Group
The main advantage of trading using opposite Episurf Medical and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Episurf Medical 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.| Episurf Medical vs. BioInvent International AB | Episurf Medical vs. Cantargia AB | Episurf Medical vs. Bonesupport Holding AB | Episurf Medical vs. Bactiguard Holding AB |
| BICO Group vs. Sinch AB | BICO Group vs. Hexatronic Group AB | BICO Group vs. Surgical Science Sweden | BICO Group vs. Embracer 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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