Correlation Between Bioter SA and Austriacard Holdings

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

By analyzing existing cross correlation between Bioter SA and Austriacard Holdings AG, you can compare the effects of market volatilities on Bioter SA and Austriacard Holdings 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 Bioter SA with a short position of Austriacard Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioter SA and Austriacard Holdings.

Diversification Opportunities for Bioter SA and Austriacard Holdings

-0.5

Correlation Coefficient

Bioter SA  Austriacard Holdings

Very good diversification

The 3 months correlation between Bioter and Austriacard is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bioter SA and Austriacard Holdings AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austriacard Holdings and Bioter SA 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 Bioter SA are associated (or correlated) with Austriacard Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austriacard Holdings has no effect on the direction of Bioter SA i.e., Bioter SA and Austriacard Holdings go up and down completely randomly.

Pair Corralation between Bioter SA and Austriacard Holdings

Assuming the 90 days trading horizon Bioter SA is expected to under-perform the Austriacard Holdings. In addition to that, Bioter SA is 1.61 times more volatile than Austriacard Holdings AG. It trades about -0.06 of its total potential returns per unit of risk. Austriacard Holdings AG is currently generating about 0.25 per unit of volatility. If you would invest  535.00  in Austriacard Holdings AG on September 15, 2024 and sell it today you would earn a total of  45.00  from holding Austriacard Holdings AG or generate 8.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Bioter SA  vs.  Austriacard Holdings AG

Bioter SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bioter SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bioter SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Austriacard Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Austriacard Holdings AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Austriacard Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bioter SA and Austriacard Holdings

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

The idea behind Bioter SA and Austriacard Holdings AG 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.