Correlation Between Advenica and BIMobject

Can any of the company-specific risk be diversified away by investing in both Advenica and BIMobject 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 Advenica and BIMobject into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advenica AB and BIMobject AB, you can compare the effects of market volatilities on Advenica and BIMobject 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 Advenica with a short position of BIMobject. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advenica and BIMobject.

Diversification Opportunities for Advenica and BIMobject

-0.36

Correlation Coefficient

Advenica  BIMobject

Very good diversification

The 3 months correlation between Advenica and BIMobject is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Advenica AB and BIMobject AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIMobject AB and Advenica 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 Advenica AB are associated (or correlated) with BIMobject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIMobject AB has no effect on the direction of Advenica i.e., Advenica and BIMobject go up and down completely randomly.

Pair Corralation between Advenica and BIMobject

Assuming the 90 days trading horizon Advenica AB is expected to under-perform the BIMobject. In addition to that, Advenica is 1.49 times more volatile than BIMobject AB. It trades about -0.08 of its total potential returns per unit of risk. BIMobject AB is currently generating about 0.01 per unit of volatility. If you would invest  437.00  in BIMobject AB on September 14, 2024 and sell it today you would earn a total of  3.00  from holding BIMobject AB or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Advenica AB  vs.  BIMobject AB

Advenica AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advenica AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BIMobject AB

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BIMobject AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, BIMobject is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Advenica and BIMobject

The main advantage of trading using opposite Advenica and BIMobject positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advenica position performs unexpectedly, BIMobject 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 BIMobject will offset losses from the drop in BIMobject's long position.

The idea behind Advenica AB and BIMobject 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.