Correlation Between Addtech AB and Beijer Ref
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Beijer Ref 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 Addtech AB and Beijer Ref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Beijer Ref AB, you can compare the effects of market volatilities on Addtech AB and Beijer Ref 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 Addtech AB with a short position of Beijer Ref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Beijer Ref.
Diversification Opportunities for Addtech AB and Beijer Ref
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Addtech and Beijer is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Beijer Ref AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijer Ref AB and Addtech 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 Addtech AB are associated (or correlated) with Beijer Ref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijer Ref AB has no effect on the direction of Addtech AB i.e., Addtech AB and Beijer Ref go up and down completely randomly.
Pair Corralation between Addtech AB and Beijer Ref
Assuming the 90 days trading horizon Addtech AB is expected to generate 0.84 times more return on investment than Beijer Ref. However, Addtech AB is 1.19 times less risky than Beijer Ref. It trades about 0.06 of its potential returns per unit of risk. Beijer Ref AB is currently generating about 0.04 per unit of risk. If you would invest 30,120 in Addtech AB on October 26, 2024 and sell it today you would earn a total of 1,600 from holding Addtech AB or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Beijer Ref AB
Performance |
| Timeline |
| Addtech AB |
| Beijer Ref AB |
Addtech AB and Beijer Ref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Beijer Ref
The main advantage of trading using opposite Addtech AB and Beijer Ref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Beijer Ref 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 Beijer Ref will offset losses from the drop in Beijer Ref's long position.| Addtech AB vs. Indutrade AB | Addtech AB vs. Lifco AB | Addtech AB vs. Lagercrantz Group AB | Addtech AB vs. AddLife AB |
| Beijer Ref vs. Addtech AB | Beijer Ref vs. Indutrade AB | Beijer Ref vs. Lifco AB | Beijer Ref vs. NIBE Industrier AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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