Correlation Between Sinch AB and BioArctic
Can any of the company-specific risk be diversified away by investing in both Sinch AB and BioArctic 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 Sinch AB and BioArctic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinch AB and BioArctic AB, you can compare the effects of market volatilities on Sinch AB and BioArctic 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 Sinch AB with a short position of BioArctic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinch AB and BioArctic.
Diversification Opportunities for Sinch AB and BioArctic
Poor diversification
The 3 months correlation between Sinch and BioArctic is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sinch AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Sinch 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 Sinch AB are associated (or correlated) with BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of Sinch AB i.e., Sinch AB and BioArctic go up and down completely randomly.
Pair Corralation between Sinch AB and BioArctic
Assuming the 90 days trading horizon Sinch AB is expected to generate 1.05 times more return on investment than BioArctic. However, Sinch AB is 1.05 times more volatile than BioArctic AB. It trades about 0.02 of its potential returns per unit of risk. BioArctic AB is currently generating about 0.02 per unit of risk. If you would invest 2,569 in Sinch AB on November 28, 2024 and sell it today you would lose (67.00) from holding Sinch AB or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinch AB vs. BioArctic AB
Performance |
| Timeline |
| Sinch AB |
| BioArctic AB |
Sinch AB and BioArctic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinch AB and BioArctic
The main advantage of trading using opposite Sinch AB and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinch AB position performs unexpectedly, BioArctic 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 BioArctic will offset losses from the drop in BioArctic's long position.| Sinch AB vs. Embracer Group AB | Sinch AB vs. Samhllsbyggnadsbolaget i Norden | Sinch AB vs. Evolution AB | Sinch AB vs. Stillfront Group AB |
| BioArctic vs. Oncopeptides AB | BioArctic vs. Camurus AB | BioArctic vs. Hansa Biopharma AB | BioArctic vs. Cantargia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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