Correlation Between Boule Diagnostics and CellaVision

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

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

Diversification Opportunities for Boule Diagnostics and CellaVision

0.22

Correlation Coefficient

Boule Diagnostics  CellaVision

Modest diversification

The 3 months correlation between Boule and CellaVision is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Boule Diagnostics AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision AB and Boule Diagnostics 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 Boule Diagnostics AB are associated (or correlated) with CellaVision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CellaVision AB has no effect on the direction of Boule Diagnostics i.e., Boule Diagnostics and CellaVision go up and down completely randomly.

Pair Corralation between Boule Diagnostics and CellaVision

Assuming the 90 days trading horizon Boule Diagnostics AB is expected to generate 1.93 times more return on investment than CellaVision. However, Boule Diagnostics is 1.93 times more volatile than CellaVision AB. It trades about 0.01 of its potential returns per unit of risk. CellaVision AB is currently generating about -0.11 per unit of risk. If you would invest  888.00  in Boule Diagnostics AB on September 16, 2024 and sell it today you would lose (28.00) from holding Boule Diagnostics AB or give up 3.15% of portfolio value over 90 days.

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

Boule Diagnostics AB  vs.  CellaVision AB

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.

CellaVision AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CellaVision 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 Boule Diagnostics and CellaVision

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

The idea behind Boule Diagnostics AB and CellaVision 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.