Correlation Between Biztech Konsulting and Ailleron

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

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

Diversification Opportunities for Biztech Konsulting and Ailleron

-0.07

Correlation Coefficient

Biztech Konsulting  Ailleron

Good diversification

The 3 months correlation between Biztech and Ailleron is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Biztech Konsulting SA and Ailleron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ailleron SA and Biztech Konsulting 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 Biztech Konsulting SA are associated (or correlated) with Ailleron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ailleron SA has no effect on the direction of Biztech Konsulting i.e., Biztech Konsulting and Ailleron go up and down completely randomly.

Pair Corralation between Biztech Konsulting and Ailleron

Assuming the 90 days trading horizon Biztech Konsulting SA is expected to generate 3.26 times more return on investment than Ailleron. However, Biztech Konsulting is 3.26 times more volatile than Ailleron SA. It trades about 0.11 of its potential returns per unit of risk. Ailleron SA is currently generating about 0.05 per unit of risk. If you would invest  15.00  in Biztech Konsulting SA on September 28, 2024 and sell it today you would earn a total of  4.00  from holding Biztech Konsulting SA or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Biztech Konsulting SA  vs.  Ailleron SA

Biztech Konsulting

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biztech Konsulting SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Biztech Konsulting reported solid returns over the last few months and may actually be approaching a breakup point.

Ailleron SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ailleron SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Ailleron is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Biztech Konsulting and Ailleron

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

The idea behind Biztech Konsulting SA and Ailleron SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.