Correlation Between Stille AB and Bactiguard Holding

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

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

Diversification Opportunities for Stille AB and Bactiguard Holding

0.29

Correlation Coefficient

Stille AB  Bactiguard Holding

Modest diversification

The 3 months correlation between Stille and Bactiguard is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stille AB and Bactiguard Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiguard Holding and Stille 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 Stille AB are associated (or correlated) with Bactiguard Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiguard Holding has no effect on the direction of Stille AB i.e., Stille AB and Bactiguard Holding go up and down completely randomly.

Pair Corralation between Stille AB and Bactiguard Holding

Assuming the 90 days trading horizon Stille AB is expected to generate 0.66 times more return on investment than Bactiguard Holding. However, Stille AB is 1.51 times less risky than Bactiguard Holding. It trades about 0.06 of its potential returns per unit of risk. Bactiguard Holding AB is currently generating about -0.04 per unit of risk. If you would invest  11,565  in Stille AB on October 9, 2024 and sell it today you would earn a total of  8,935  from holding Stille AB or generate 77.26% return on investment over 90 days.

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

Stille AB  vs.  Bactiguard Holding AB

Stille AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stille AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Stille AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Bactiguard Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Stille AB and Bactiguard Holding

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

The idea behind Stille AB and Bactiguard Holding 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..