Correlation Between AddLife AB and Bergman Beving
Can any of the company-specific risk be diversified away by investing in both AddLife AB and Bergman Beving 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 AddLife AB and Bergman Beving into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AddLife AB and Bergman Beving AB, you can compare the effects of market volatilities on AddLife AB and Bergman Beving 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 AddLife AB with a short position of Bergman Beving. Check out your portfolio center. Please also check ongoing floating volatility patterns of AddLife AB and Bergman Beving.
Diversification Opportunities for AddLife AB and Bergman Beving
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AddLife and Bergman is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AddLife AB and Bergman Beving AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergman Beving AB and AddLife 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 AddLife AB are associated (or correlated) with Bergman Beving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergman Beving AB has no effect on the direction of AddLife AB i.e., AddLife AB and Bergman Beving go up and down completely randomly.
Pair Corralation between AddLife AB and Bergman Beving
Assuming the 90 days trading horizon AddLife AB is expected to generate 1.1 times more return on investment than Bergman Beving. However, AddLife AB is 1.1 times more volatile than Bergman Beving AB. It trades about 0.15 of its potential returns per unit of risk. Bergman Beving AB is currently generating about 0.02 per unit of risk. If you would invest 14,120 in AddLife AB on November 3, 2024 and sell it today you would earn a total of 1,030 from holding AddLife AB or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AddLife AB vs. Bergman Beving AB
Performance |
| Timeline |
| AddLife AB |
| Bergman Beving AB |
AddLife AB and Bergman Beving Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AddLife AB and Bergman Beving
The main advantage of trading using opposite AddLife AB and Bergman Beving positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AddLife AB position performs unexpectedly, Bergman Beving 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 Bergman Beving will offset losses from the drop in Bergman Beving's long position.| AddLife AB vs. Addtech AB | AddLife AB vs. Lifco AB | AddLife AB vs. Indutrade AB | AddLife AB vs. Lagercrantz Group AB |
| Bergman Beving vs. Lagercrantz Group AB | Bergman Beving vs. Addtech AB | Bergman Beving vs. AddLife AB | Bergman Beving vs. Bufab Holding 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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