Correlation Between Bactiquant and Moens Bank

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

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

Diversification Opportunities for Bactiquant and Moens Bank

0.78

Correlation Coefficient

Bactiquant  Moens Bank

Poor diversification

The 3 months correlation between Bactiquant and Moens is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bactiquant AS and Moens Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moens Bank AS and Bactiquant 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 Bactiquant AS are associated (or correlated) with Moens Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moens Bank AS has no effect on the direction of Bactiquant i.e., Bactiquant and Moens Bank go up and down completely randomly.

Pair Corralation between Bactiquant and Moens Bank

Assuming the 90 days trading horizon Bactiquant AS is expected to under-perform the Moens Bank. In addition to that, Bactiquant is 4.65 times more volatile than Moens Bank AS. It trades about -0.02 of its total potential returns per unit of risk. Moens Bank AS is currently generating about -0.05 per unit of volatility. If you would invest  22,800  in Moens Bank AS on September 13, 2024 and sell it today you would lose (800.00) from holding Moens Bank AS or give up 3.51% of portfolio value over 90 days.

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

Bactiquant AS  vs.  Moens Bank AS

Bactiquant AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bactiquant AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Moens Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moens Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Moens Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bactiquant and Moens Bank

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

The idea behind Bactiquant AS and Moens Bank AS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.