Correlation Between Bactiquant and Netcompany Group

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

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

Diversification Opportunities for Bactiquant and Netcompany Group

0.09

Correlation Coefficient

Bactiquant  Netcompany Group

Significant diversification

The 3 months correlation between Bactiquant and Netcompany is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bactiquant AS and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group and Bactiquant 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 Bactiquant AS are associated (or correlated) with Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of Bactiquant i.e., Bactiquant and Netcompany Group go up and down completely randomly.

Pair Corralation between Bactiquant and Netcompany Group

Assuming the 90 days trading horizon Bactiquant AS is expected to generate 5.57 times more return on investment than Netcompany Group. However, Bactiquant is 5.57 times more volatile than Netcompany Group AS. It trades about 0.05 of its potential returns per unit of risk. Netcompany Group AS is currently generating about -0.11 per unit of risk. If you would invest  402.00  in Bactiquant AS on December 4, 2024 and sell it today you would lose (32.00) from holding Bactiquant AS or give up 7.96% of portfolio value over 90 days.

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

Bactiquant AS  vs.  Netcompany Group AS

Bactiquant AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bactiquant AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Bactiquant sustained solid returns over the last few months and may actually be approaching a breakup point.

Netcompany Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netcompany Group AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bactiquant and Netcompany Group

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

The idea behind Bactiquant AS and Netcompany Group AS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.