Correlation Between Cyxone AB and BioArctic

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

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

Diversification Opportunities for Cyxone AB and BioArctic

-0.52

Correlation Coefficient

Cyxone AB  BioArctic

Excellent diversification

The 3 months correlation between Cyxone and BioArctic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cyxone AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Cyxone AB 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 Cyxone AB are associated (or correlated) with BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of Cyxone AB i.e., Cyxone AB and BioArctic go up and down completely randomly.

Pair Corralation between Cyxone AB and BioArctic

Assuming the 90 days trading horizon Cyxone AB is expected to under-perform the BioArctic. In addition to that, Cyxone AB is 2.08 times more volatile than BioArctic AB. It trades about -0.05 of its total potential returns per unit of risk. BioArctic AB is currently generating about 0.01 per unit of volatility. If you would invest  23,680  in BioArctic AB on October 10, 2024 and sell it today you would lose (2,720) from holding BioArctic AB or give up 11.49% of portfolio value over 90 days.

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

Cyxone AB  vs.  BioArctic AB

Cyxone AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyxone 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BioArctic AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BioArctic AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, BioArctic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cyxone AB and BioArctic

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

The idea behind Cyxone AB and BioArctic 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.