Correlation Between Bone Biologics and BICO Group

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

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

Diversification Opportunities for Bone Biologics and BICO Group

0.0

Correlation Coefficient

Bone Biologics  BICO Group

Pay attention - limited upside

The 3 months correlation between Bone and BICO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bone Biologics Corp and BICO Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICO Group AB and Bone Biologics 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 Bone Biologics Corp are associated (or correlated) with BICO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICO Group AB has no effect on the direction of Bone Biologics i.e., Bone Biologics and BICO Group go up and down completely randomly.

Pair Corralation between Bone Biologics and BICO Group

If you would invest  3,050  in Bone Biologics Corp on December 28, 2024 and sell it today you would lose (1,030) from holding Bone Biologics Corp or give up 33.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	48.33%
Values	Daily Returns

Bone Biologics Corp  vs.  BICO Group AB

Bone Biologics Corp

Risk-Adjusted Performance

Insignificant

Over the last 90 days Bone Biologics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile technical and fundamental indicators, Bone Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

BICO Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BICO Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, BICO Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bone Biologics and BICO Group

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

The idea behind Bone Biologics Corp and BICO Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.