Correlation Between Nasdaq and BICO Group
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and BICO Group AB, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and BICO Group.
Diversification Opportunities for Nasdaq and BICO Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and BICO is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and BICO Group go up and down completely randomly.
Pair Corralation between Nasdaq and BICO Group
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.46 times more return on investment than BICO Group. However, Nasdaq Inc is 2.19 times less risky than BICO Group. It trades about 0.24 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.02 per unit of risk. If you would invest 5,831 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 2,468 from holding Nasdaq Inc or generate 42.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nasdaq Inc vs. BICO Group AB
Performance |
| Timeline |
| Nasdaq Inc |
| BICO Group AB |
Nasdaq and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and BICO Group
The main advantage of trading using opposite Nasdaq and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and BICO Group AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BICO Group vs. Anteris Technologies | BICO Group vs. Brain Scientific | BICO Group vs. Aurora Spine | BICO Group vs. Tenon Medical |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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