Correlation Between Senzime AB and BICO Group
Can any of the company-specific risk be diversified away by investing in both Senzime 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 Senzime 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 Senzime AB and BICO Group AB, you can compare the effects of market volatilities on Senzime 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 Senzime AB with a short position of BICO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senzime AB and BICO Group.
Diversification Opportunities for Senzime AB and BICO Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senzime and BICO is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Senzime 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 Senzime 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 Senzime 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 Senzime AB i.e., Senzime AB and BICO Group go up and down completely randomly.
Pair Corralation between Senzime AB and BICO Group
Assuming the 90 days trading horizon Senzime AB is expected to generate 1.13 times more return on investment than BICO Group. However, Senzime AB is 1.13 times more volatile than BICO Group AB. It trades about -0.05 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.11 per unit of risk. If you would invest 615.00 in Senzime AB on August 25, 2024 and sell it today you would lose (44.00) from holding Senzime AB or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senzime AB vs. BICO Group AB
Performance |
| Timeline |
| Senzime AB |
| BICO Group AB |
Senzime AB and BICO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senzime AB and BICO Group
The main advantage of trading using opposite Senzime AB and BICO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime 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.The idea behind Senzime AB 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. Xvivo Perfusion AB | BICO Group vs. Mentice AB | BICO Group vs. SpectraCure AB | BICO Group vs. Senzime 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |