Correlation Between Agat Ejendomme and BioPorto

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

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

Diversification Opportunities for Agat Ejendomme and BioPorto

0.64

Correlation Coefficient

Agat Ejendomme  BioPorto

Poor diversification

The 3 months correlation between Agat and BioPorto is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Agat Ejendomme AS and BioPorto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPorto and Agat Ejendomme 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 Agat Ejendomme AS are associated (or correlated) with BioPorto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPorto has no effect on the direction of Agat Ejendomme i.e., Agat Ejendomme and BioPorto go up and down completely randomly.

Pair Corralation between Agat Ejendomme and BioPorto

Assuming the 90 days trading horizon Agat Ejendomme AS is expected to under-perform the BioPorto. But the stock apears to be less risky and, when comparing its historical volatility, Agat Ejendomme AS is 1.91 times less risky than BioPorto. The stock trades about -0.04 of its potential returns per unit of risk. The BioPorto is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  170.00  in BioPorto on October 4, 2024 and sell it today you would lose (5.00) from holding BioPorto or give up 2.94% of portfolio value over 90 days.

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

Agat Ejendomme AS  vs.  BioPorto

Agat Ejendomme AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agat Ejendomme AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Agat Ejendomme is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

BioPorto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioPorto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Agat Ejendomme and BioPorto

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

The idea behind Agat Ejendomme AS and BioPorto 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.