Correlation Between Dataproces Group and BioPorto

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

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

Diversification Opportunities for Dataproces Group and BioPorto

-0.25

Correlation Coefficient

Dataproces Group  BioPorto

Very good diversification

The 3 months correlation between Dataproces and BioPorto is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and BioPorto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPorto and Dataproces 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 Dataproces Group AS are associated (or correlated) with BioPorto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPorto has no effect on the direction of Dataproces Group i.e., Dataproces Group and BioPorto go up and down completely randomly.

Pair Corralation between Dataproces Group and BioPorto

Assuming the 90 days trading horizon Dataproces Group AS is expected to generate 0.98 times more return on investment than BioPorto. However, Dataproces Group AS is 1.02 times less risky than BioPorto. It trades about 0.11 of its potential returns per unit of risk. BioPorto is currently generating about -0.08 per unit of risk. If you would invest  510.00  in Dataproces Group AS on September 16, 2024 and sell it today you would earn a total of  95.00  from holding Dataproces Group AS or generate 18.63% return on investment over 90 days.

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

Dataproces Group AS  vs.  BioPorto

Dataproces Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

BioPorto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioPorto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dataproces Group and BioPorto

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

The idea behind Dataproces Group AS and BioPorto 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.