Correlation Between BICO Group and Tenon Medical

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

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

Diversification Opportunities for BICO Group and Tenon Medical

0.0

Correlation Coefficient

BICO Group  Tenon Medical

Pay attention - limited upside

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

Pair Corralation between BICO Group and Tenon Medical

If you would invest  191.00  in Tenon Medical on December 28, 2024 and sell it today you would earn a total of  89.00  from holding Tenon Medical or generate 46.6% return on investment over 90 days.

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

BICO Group AB  vs.  Tenon Medical

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.

Tenon Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tenon Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Tenon Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BICO Group and Tenon Medical

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

The idea behind BICO Group AB and Tenon Medical 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.