Correlation Between Mentice AB and BICO Group
Can any of the company-specific risk be diversified away by investing in both Mentice AB 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 Mentice AB and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mentice AB and BICO Group AB, you can compare the effects of market volatilities on Mentice AB 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 Mentice AB with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mentice AB and BICO Group.
Diversification Opportunities for Mentice AB and BICO Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mentice and BICO is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mentice 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 Mentice AB 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 Mentice 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 Mentice AB i.e., Mentice AB and BICO Group go up and down completely randomly.
Pair Corralation between Mentice AB and BICO Group
Assuming the 90 days trading horizon Mentice AB is expected to generate 0.91 times more return on investment than BICO Group. However, Mentice AB is 1.09 times less risky than BICO Group. It trades about -0.12 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.21 per unit of risk. If you would invest 2,790 in Mentice AB on August 29, 2024 and sell it today you would lose (530.00) from holding Mentice AB or give up 19.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mentice AB vs. BICO Group AB
Performance |
| Timeline |
| Mentice AB |
| BICO Group AB |
Mentice AB and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mentice AB and BICO Group
The main advantage of trading using opposite Mentice AB and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mentice AB 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.| Mentice AB vs. Surgical Science Sweden | Mentice AB vs. C Rad AB | Mentice AB vs. Xvivo Perfusion AB | Mentice AB vs. Biotage AB |
| BICO Group vs. KABE Group AB | BICO Group vs. IAR Systems Group | BICO Group vs. Mekonomen AB | BICO Group vs. Clinical Laserthermia Systems |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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