Correlation Between Senzime AB and BioArctic

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

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

Diversification Opportunities for Senzime AB and BioArctic

-0.67

Correlation Coefficient

Senzime AB  BioArctic

Excellent diversification

The 3 months correlation between Senzime and BioArctic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Senzime AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Senzime 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 Senzime 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 Senzime AB i.e., Senzime AB and BioArctic go up and down completely randomly.

Pair Corralation between Senzime AB and BioArctic

Assuming the 90 days trading horizon Senzime AB is expected to generate 2.2 times less return on investment than BioArctic. But when comparing it to its historical volatility, Senzime AB is 2.17 times less risky than BioArctic. It trades about 0.15 of its potential returns per unit of risk. BioArctic AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  18,010  in BioArctic AB on October 10, 2024 and sell it today you would earn a total of  2,950  from holding BioArctic AB or generate 16.38% return on investment over 90 days.

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

Senzime AB  vs.  BioArctic AB

Senzime AB

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Senzime AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Senzime AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the 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 Senzime AB and BioArctic

The main advantage of trading using opposite Senzime AB and BioArctic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senzime 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 Senzime 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.