Correlation Between RaySearch Laboratories and Bonzun AB
Can any of the company-specific risk be diversified away by investing in both RaySearch Laboratories and Bonzun AB 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 RaySearch Laboratories and Bonzun AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RaySearch Laboratories AB and Bonzun AB, you can compare the effects of market volatilities on RaySearch Laboratories and Bonzun AB 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 RaySearch Laboratories with a short position of Bonzun AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of RaySearch Laboratories and Bonzun AB.
Diversification Opportunities for RaySearch Laboratories and Bonzun AB
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RaySearch and Bonzun is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding RaySearch Laboratories AB and Bonzun AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonzun AB and RaySearch Laboratories 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 RaySearch Laboratories AB are associated (or correlated) with Bonzun AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonzun AB has no effect on the direction of RaySearch Laboratories i.e., RaySearch Laboratories and Bonzun AB go up and down completely randomly.
Pair Corralation between RaySearch Laboratories and Bonzun AB
Assuming the 90 days trading horizon RaySearch Laboratories AB is expected to generate 0.42 times more return on investment than Bonzun AB. However, RaySearch Laboratories AB is 2.38 times less risky than Bonzun AB. It trades about 0.28 of its potential returns per unit of risk. Bonzun AB is currently generating about -0.17 per unit of risk. If you would invest 16,040 in RaySearch Laboratories AB on August 29, 2024 and sell it today you would earn a total of 4,760 from holding RaySearch Laboratories AB or generate 29.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RaySearch Laboratories AB vs. Bonzun AB
Performance |
| Timeline |
| RaySearch Laboratories |
| Bonzun AB |
RaySearch Laboratories and Bonzun AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RaySearch Laboratories and Bonzun AB
The main advantage of trading using opposite RaySearch Laboratories and Bonzun AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RaySearch Laboratories position performs unexpectedly, Bonzun AB 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 Bonzun AB will offset losses from the drop in Bonzun AB's long position.| RaySearch Laboratories vs. Mendus AB | RaySearch Laboratories vs. Lidds AB | RaySearch Laboratories vs. Corline Biomedical AB | RaySearch Laboratories vs. Clinical Laserthermia Systems |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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