Correlation Between Novacyt SA and BICO Group
Can any of the company-specific risk be diversified away by investing in both Novacyt SA 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 Novacyt SA and BICO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novacyt SA and BICO Group AB, you can compare the effects of market volatilities on Novacyt SA 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 Novacyt SA with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novacyt SA and BICO Group.
Diversification Opportunities for Novacyt SA and BICO Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Novacyt and BICO is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Novacyt SA 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 Novacyt SA 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 Novacyt SA 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 Novacyt SA i.e., Novacyt SA and BICO Group go up and down completely randomly.
Pair Corralation between Novacyt SA and BICO Group
Assuming the 90 days horizon Novacyt SA is expected to generate 1.19 times more return on investment than BICO Group. However, Novacyt SA is 1.19 times more volatile than BICO Group AB. It trades about 0.0 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.03 per unit of risk. If you would invest 118.00 in Novacyt SA on October 13, 2024 and sell it today you would lose (55.00) from holding Novacyt SA or give up 46.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novacyt SA vs. BICO Group AB
Performance |
| Timeline |
| Novacyt SA |
| BICO Group AB |
Novacyt SA and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novacyt SA and BICO Group
The main advantage of trading using opposite Novacyt SA and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novacyt SA 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.| Novacyt SA vs. Aethlon Medical | Novacyt SA vs. Bone Biologics Corp | Novacyt SA vs. Tivic Health Systems | Novacyt SA vs. Cytosorbents Crp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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