Correlation Between BioGaia AB and Boule Diagnostics

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

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

Diversification Opportunities for BioGaia AB and Boule Diagnostics

0.69

Correlation Coefficient

BioGaia AB  Boule Diagnostics

Poor diversification

The 3 months correlation between BioGaia and Boule is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and Boule Diagnostics AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boule Diagnostics and BioGaia 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 BioGaia AB are associated (or correlated) with Boule Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boule Diagnostics has no effect on the direction of BioGaia AB i.e., BioGaia AB and Boule Diagnostics go up and down completely randomly.

Pair Corralation between BioGaia AB and Boule Diagnostics

Assuming the 90 days trading horizon BioGaia AB is expected to under-perform the Boule Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, BioGaia AB is 2.92 times less risky than Boule Diagnostics. The stock trades about -0.06 of its potential returns per unit of risk. The Boule Diagnostics AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  898.00  in Boule Diagnostics AB on September 17, 2024 and sell it today you would lose (38.00) from holding Boule Diagnostics AB or give up 4.23% of portfolio value over 90 days.

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

BioGaia AB  vs.  Boule Diagnostics AB

BioGaia AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioGaia AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BioGaia AB is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Boule Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BioGaia AB and Boule Diagnostics

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

The idea behind BioGaia AB and Boule Diagnostics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.