Correlation Between Indutrade and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Indutrade and Bloomsbury Publishing 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 Indutrade and Bloomsbury Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Indutrade and Bloomsbury Publishing 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 Indutrade with a short position of Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Bloomsbury Publishing.
Diversification Opportunities for Indutrade and Bloomsbury Publishing
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indutrade and Bloomsbury is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc and Indutrade 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 Indutrade AB are associated (or correlated) with Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Indutrade i.e., Indutrade and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Indutrade and Bloomsbury Publishing
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.82 times more return on investment than Bloomsbury Publishing. However, Indutrade AB is 1.22 times less risky than Bloomsbury Publishing. It trades about -0.03 of its potential returns per unit of risk. Bloomsbury Publishing Plc is currently generating about -0.14 per unit of risk. If you would invest 28,460 in Indutrade AB on October 11, 2024 and sell it today you would lose (240.00) from holding Indutrade AB or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. Bloomsbury Publishing Plc
Performance |
| Timeline |
| Indutrade AB |
| Bloomsbury Publishing Plc |
Indutrade and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Bloomsbury Publishing
The main advantage of trading using opposite Indutrade and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.| Indutrade vs. Fevertree Drinks Plc | Indutrade vs. Ebro Foods | Indutrade vs. alstria office REIT AG | Indutrade vs. Ecclesiastical Insurance Office |
| Bloomsbury Publishing vs. Indutrade AB | Bloomsbury Publishing vs. BE Semiconductor Industries | Bloomsbury Publishing vs. Nordic Semiconductor ASA | Bloomsbury Publishing vs. Baker Steel Resources |
Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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