Correlation Between Triboron International and BICO Group

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

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

Diversification Opportunities for Triboron International and BICO Group

0.02

Correlation Coefficient

Triboron International  BICO Group

Significant diversification

The 3 months correlation between Triboron and BICO is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Triboron International AB and BICO Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BICO Group AB and Triboron International 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 Triboron International AB are associated (or correlated) with BICO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BICO Group AB has no effect on the direction of Triboron International i.e., Triboron International and BICO Group go up and down completely randomly.

Pair Corralation between Triboron International and BICO Group

Assuming the 90 days trading horizon Triboron International AB is expected to generate 1.0 times more return on investment than BICO Group. However, Triboron International is 1.0 times more volatile than BICO Group AB. It trades about 0.03 of its potential returns per unit of risk. BICO Group AB is currently generating about -0.09 per unit of risk. If you would invest  38.00  in Triboron International AB on September 12, 2024 and sell it today you would earn a total of  1.00  from holding Triboron International AB or generate 2.63% return on investment over 90 days.

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

Triboron International AB  vs.  BICO Group AB

Triboron International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triboron International AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Triboron International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BICO Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Triboron International and BICO Group

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

The idea behind Triboron International AB and BICO Group 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.