Correlation Between Elekta AB and BioGaia AB
Can any of the company-specific risk be diversified away by investing in both Elekta AB 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 Elekta AB and BioGaia AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elekta AB and BioGaia AB, you can compare the effects of market volatilities on Elekta AB 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 Elekta AB with a short position of BioGaia AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elekta AB and BioGaia AB.
Diversification Opportunities for Elekta AB and BioGaia AB
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elekta and BioGaia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Elekta AB and BioGaia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioGaia AB and Elekta 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 Elekta 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 Elekta AB i.e., Elekta AB and BioGaia AB go up and down completely randomly.
Pair Corralation between Elekta AB and BioGaia AB
Assuming the 90 days trading horizon Elekta AB is expected to generate 1.13 times more return on investment than BioGaia AB. However, Elekta AB is 1.13 times more volatile than BioGaia AB. It trades about 0.0 of its potential returns per unit of risk. BioGaia AB is currently generating about -0.09 per unit of risk. If you would invest 6,589 in Elekta AB on September 3, 2024 and sell it today you would lose (84.00) from holding Elekta AB or give up 1.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Elekta AB vs. BioGaia AB
Performance |
Timeline |
Elekta AB |
BioGaia AB |
Elekta AB and BioGaia AB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elekta AB and BioGaia AB
The main advantage of trading using opposite Elekta AB and BioGaia AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elekta AB 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.Elekta AB vs. Getinge AB ser | Elekta AB vs. AB SKF | Elekta AB vs. ASSA ABLOY AB | Elekta AB vs. Husqvarna AB |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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