Correlation Between BioGaia AB and CellaVision

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

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

Diversification Opportunities for BioGaia AB and CellaVision

0.35

Correlation Coefficient

BioGaia AB  CellaVision

Weak diversification

The 3 months correlation between BioGaia and CellaVision is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BioGaia AB and CellaVision AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CellaVision AB 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 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 BioGaia AB i.e., BioGaia AB and CellaVision go up and down completely randomly.

Pair Corralation between BioGaia AB and CellaVision

Assuming the 90 days trading horizon BioGaia AB is expected to generate 10.93 times less return on investment than CellaVision. But when comparing it to its historical volatility, BioGaia AB is 1.89 times less risky than CellaVision. It trades about 0.01 of its potential returns per unit of risk. CellaVision AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  16,293  in CellaVision AB on April 24, 2025 and sell it today you would earn a total of  967.00  from holding CellaVision AB or generate 5.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

BioGaia AB  vs.  CellaVision AB

BioGaia AB

Risk-Adjusted Performance

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.

CellaVision AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CellaVision AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CellaVision may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BioGaia AB and CellaVision

The main advantage of trading using opposite BioGaia AB and CellaVision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioGaia AB 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 BioGaia 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.