Correlation Between IAR Systems and BICO Group
Can any of the company-specific risk be diversified away by investing in both IAR Systems 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 IAR Systems and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAR Systems Group and BICO Group AB, you can compare the effects of market volatilities on IAR Systems 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 IAR Systems with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and BICO Group.
Diversification Opportunities for IAR Systems and BICO Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IAR and BICO is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group 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 IAR Systems 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 IAR Systems Group 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 IAR Systems i.e., IAR Systems and BICO Group go up and down completely randomly.
Pair Corralation between IAR Systems and BICO Group
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 0.42 times more return on investment than BICO Group. However, IAR Systems Group is 2.4 times less risky than BICO Group. It trades about 0.33 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.08 per unit of risk. If you would invest 12,150 in IAR Systems Group on September 1, 2024 and sell it today you would earn a total of 2,350 from holding IAR Systems Group or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
IAR Systems Group vs. BICO Group AB
Performance |
| Timeline |
| IAR Systems Group |
| BICO Group AB |
IAR Systems and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and BICO Group
The main advantage of trading using opposite IAR Systems and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems 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.| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT AB |
| BICO Group vs. Xvivo Perfusion AB | BICO Group vs. Bactiguard Holding AB | BICO Group vs. Stille AB | BICO Group vs. SpectraCure 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |