Correlation Between Hedera Group and Biotage AB
Can any of the company-specific risk be diversified away by investing in both Hedera Group and Biotage AB 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 Hedera Group and Biotage AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hedera Group publ and Biotage AB, you can compare the effects of market volatilities on Hedera Group and Biotage AB 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 Hedera Group with a short position of Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedera Group and Biotage AB.
Diversification Opportunities for Hedera Group and Biotage AB
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hedera and Biotage is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hedera Group publ and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and Hedera Group 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 Hedera Group publ are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of Hedera Group i.e., Hedera Group and Biotage AB go up and down completely randomly.
Pair Corralation between Hedera Group and Biotage AB
Assuming the 90 days trading horizon Hedera Group publ is expected to under-perform the Biotage AB. In addition to that, Hedera Group is 2.73 times more volatile than Biotage AB. It trades about -0.02 of its total potential returns per unit of risk. Biotage AB is currently generating about 0.06 per unit of volatility. If you would invest 16,140 in Biotage AB on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Biotage AB or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hedera Group publ vs. Biotage AB
Performance |
| Timeline |
| Hedera Group publ |
| Biotage AB |
Hedera Group and Biotage AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hedera Group and Biotage AB
The main advantage of trading using opposite Hedera Group and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hedera Group position performs unexpectedly, Biotage AB 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 Biotage AB will offset losses from the drop in Biotage AB's long position.| Hedera Group vs. Biotage AB | Hedera Group vs. Addnode Group AB | Hedera Group vs. Beijer Ref AB | Hedera Group vs. CellaVision AB |
| Biotage AB vs. CellaVision AB | Biotage AB vs. Vitrolife AB | Biotage AB vs. Sectra AB | Biotage AB vs. BioGaia 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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