Correlation Between Bactiguard Holding and Neola Medical

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Can any of the company-specific risk be diversified away by investing in both Bactiguard Holding and Neola Medical 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 Bactiguard Holding and Neola Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bactiguard Holding AB and Neola Medical AB, you can compare the effects of market volatilities on Bactiguard Holding and Neola Medical 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 Bactiguard Holding with a short position of Neola Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bactiguard Holding and Neola Medical.

Diversification Opportunities for Bactiguard Holding and Neola Medical

BactiguardNeolaDiversified AwayBactiguardNeolaDiversified Away100%
0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bactiguard and Neola is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bactiguard Holding AB and Neola Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neola Medical AB and Bactiguard Holding 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 Bactiguard Holding AB are associated (or correlated) with Neola Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neola Medical AB has no effect on the direction of Bactiguard Holding i.e., Bactiguard Holding and Neola Medical go up and down completely randomly.

Pair Corralation between Bactiguard Holding and Neola Medical

Assuming the 90 days trading horizon Bactiguard Holding AB is expected to under-perform the Neola Medical. But the stock apears to be less risky and, when comparing its historical volatility, Bactiguard Holding AB is 1.48 times less risky than Neola Medical. The stock trades about -0.3 of its potential returns per unit of risk. The Neola Medical AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  276.00  in Neola Medical AB on September 13, 2024 and sell it today you would lose (12.00) from holding Neola Medical AB or give up 4.35% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bactiguard Holding AB  vs.  Neola Medical AB

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -40-30-20-100
JavaScript chart by amCharts 3.21.15BACTI-B NEOLA
       Timeline  
Bactiguard Holding 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Bactiguard Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec354045505560
Neola Medical AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Neola Medical AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Neola Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec22.533.5

Bactiguard Holding and Neola Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.65-4.23-2.81-1.40.01.042.083.124.16 0.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15BACTI-B NEOLA
       Returns  

Pair Trading with Bactiguard Holding and Neola Medical

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

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