Correlation Between Byggmax Group and BioGaia AB

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

Diversification Opportunities for Byggmax Group and BioGaia AB

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Byggmax and BioGaia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Byggmax Group AB and BioGaia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioGaia AB and Byggmax 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 Byggmax Group AB are associated (or correlated) with BioGaia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioGaia AB has no effect on the direction of Byggmax Group i.e., Byggmax Group and BioGaia AB go up and down completely randomly.

Pair Corralation between Byggmax Group and BioGaia AB

Assuming the 90 days trading horizon Byggmax Group AB is expected to generate 1.87 times more return on investment than BioGaia AB. However, Byggmax Group is 1.87 times more volatile than BioGaia AB. It trades about 0.05 of its potential returns per unit of risk. BioGaia AB is currently generating about -0.13 per unit of risk. If you would invest  4,104  in Byggmax Group AB on August 31, 2024 and sell it today you would earn a total of  292.00  from holding Byggmax Group AB or generate 7.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Byggmax Group AB  vs.  BioGaia AB

 Performance 
       Timeline  
Byggmax Group AB 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Byggmax Group AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Byggmax Group may actually be approaching a critical reversion point that can send shares even higher in December 2024.
BioGaia AB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BioGaia AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Byggmax Group and BioGaia AB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Byggmax Group and BioGaia AB

The main advantage of trading using opposite Byggmax Group and BioGaia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Byggmax Group position performs unexpectedly, BioGaia AB 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 BioGaia AB will offset losses from the drop in BioGaia AB's long position.
The idea behind Byggmax Group AB and BioGaia 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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