Correlation Between BTS Group and Biotage AB

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

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

Diversification Opportunities for BTS Group and Biotage AB

-0.12

Correlation Coefficient

BTS Group  Biotage AB

Good diversification

The 3 months correlation between BTS and Biotage is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group AB and Biotage AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotage AB and BTS 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 BTS Group AB are associated (or correlated) with Biotage AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotage AB has no effect on the direction of BTS Group i.e., BTS Group and Biotage AB go up and down completely randomly.

Pair Corralation between BTS Group and Biotage AB

Assuming the 90 days trading horizon BTS Group AB is expected to generate 0.44 times more return on investment than Biotage AB. However, BTS Group AB is 2.26 times less risky than Biotage AB. It trades about 0.03 of its potential returns per unit of risk. Biotage AB is currently generating about -0.19 per unit of risk. If you would invest  26,300  in BTS Group AB on December 30, 2024 and sell it today you would earn a total of  600.00  from holding BTS Group AB or generate 2.28% return on investment over 90 days.

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

BTS Group AB  vs.  Biotage AB

BTS Group AB

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BTS Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BTS Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Biotage AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biotage AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BTS Group and Biotage AB

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

The idea behind BTS Group AB and Biotage 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.