Correlation Between Infant Bacterial and Securitas
Can any of the company-specific risk be diversified away by investing in both Infant Bacterial and Securitas 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 Infant Bacterial and Securitas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infant Bacterial Therapeutics and Securitas AB, you can compare the effects of market volatilities on Infant Bacterial and Securitas 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 Infant Bacterial with a short position of Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infant Bacterial and Securitas.
Diversification Opportunities for Infant Bacterial and Securitas
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infant and Securitas is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Infant Bacterial Therapeutics and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB and Infant Bacterial 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 Infant Bacterial Therapeutics are associated (or correlated) with Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of Infant Bacterial i.e., Infant Bacterial and Securitas go up and down completely randomly.
Pair Corralation between Infant Bacterial and Securitas
Assuming the 90 days trading horizon Infant Bacterial Therapeutics is expected to generate 1.48 times more return on investment than Securitas. However, Infant Bacterial is 1.48 times more volatile than Securitas AB. It trades about 0.09 of its potential returns per unit of risk. Securitas AB is currently generating about 0.11 per unit of risk. If you would invest 3,740 in Infant Bacterial Therapeutics on August 29, 2024 and sell it today you would earn a total of 240.00 from holding Infant Bacterial Therapeutics or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infant Bacterial Therapeutics vs. Securitas AB
Performance |
| Timeline |
| Infant Bacterial |
| Securitas AB |
Infant Bacterial and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infant Bacterial and Securitas
The main advantage of trading using opposite Infant Bacterial and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infant Bacterial position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| Infant Bacterial vs. BioGaia AB | Infant Bacterial vs. Cantargia AB | Infant Bacterial vs. XSpray Pharma AB | Infant Bacterial vs. Immunovia publ 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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