Correlation Between AB SKF and Biotage AB
Can any of the company-specific risk be diversified away by investing in both AB SKF and Biotage 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 AB SKF and Biotage AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB SKF and Biotage AB, you can compare the effects of market volatilities on AB SKF and Biotage 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 AB SKF with a short position of Biotage AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and Biotage AB.
Diversification Opportunities for AB SKF and Biotage AB
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SKF-B and Biotage is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and AB SKF 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 AB SKF are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of AB SKF i.e., AB SKF and Biotage AB go up and down completely randomly.
Pair Corralation between AB SKF and Biotage AB
Assuming the 90 days trading horizon AB SKF is expected to generate 0.45 times more return on investment than Biotage AB. However, AB SKF is 2.21 times less risky than Biotage AB. It trades about 0.22 of its potential returns per unit of risk. Biotage AB is currently generating about -0.17 per unit of risk. If you would invest 20,980 in AB SKF on November 3, 2024 and sell it today you would earn a total of 1,500 from holding AB SKF or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB SKF vs. Biotage AB
Performance |
| Timeline |
| AB SKF |
| Biotage AB |
AB SKF and Biotage AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and Biotage AB
The main advantage of trading using opposite AB SKF and Biotage AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, Biotage 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 Biotage AB will offset losses from the drop in Biotage AB's long position.The idea behind AB SKF and Biotage 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.| Biotage AB vs. BioArctic AB | Biotage AB vs. Camurus AB | Biotage AB vs. Xvivo Perfusion AB | Biotage AB vs. Surgical Science Sweden |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |