Correlation Between TalkPool and BioGaia AB
Can any of the company-specific risk be diversified away by investing in both TalkPool and BioGaia 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 TalkPool and BioGaia AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TalkPool AG and BioGaia AB, you can compare the effects of market volatilities on TalkPool and BioGaia 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 TalkPool with a short position of BioGaia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of TalkPool and BioGaia AB.
Diversification Opportunities for TalkPool and BioGaia AB
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TalkPool and BioGaia is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding TalkPool AG and BioGaia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioGaia AB and TalkPool 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 TalkPool AG are associated (or correlated) with BioGaia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioGaia AB has no effect on the direction of TalkPool i.e., TalkPool and BioGaia AB go up and down completely randomly.
Pair Corralation between TalkPool and BioGaia AB
Assuming the 90 days trading horizon TalkPool AG is expected to generate 1.91 times more return on investment than BioGaia AB. However, TalkPool is 1.91 times more volatile than BioGaia AB. It trades about 0.04 of its potential returns per unit of risk. BioGaia AB is currently generating about 0.02 per unit of risk. If you would invest 530.00 in TalkPool AG on August 25, 2024 and sell it today you would earn a total of 136.00 from holding TalkPool AG or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TalkPool AG vs. BioGaia AB
Performance |
| Timeline |
| TalkPool AG |
| BioGaia AB |
TalkPool and BioGaia AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TalkPool and BioGaia AB
The main advantage of trading using opposite TalkPool and BioGaia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TalkPool position performs unexpectedly, BioGaia 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 BioGaia AB will offset losses from the drop in BioGaia AB's long position.| TalkPool vs. Lidds AB | TalkPool vs. Serstech AB | TalkPool vs. Transtema Group AB | TalkPool vs. Enorama Pharma 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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