Correlation Between Alimak Hek and Balco Group
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Balco Group 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 Alimak Hek and Balco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimak Hek Group and Balco Group AB, you can compare the effects of market volatilities on Alimak Hek and Balco Group 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 Alimak Hek with a short position of Balco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Balco Group.
Diversification Opportunities for Alimak Hek and Balco Group
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alimak and Balco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Balco Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balco Group AB and Alimak Hek 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 Alimak Hek Group are associated (or correlated) with Balco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balco Group AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Balco Group go up and down completely randomly.
Pair Corralation between Alimak Hek and Balco Group
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 1.01 times more return on investment than Balco Group. However, Alimak Hek is 1.01 times more volatile than Balco Group AB. It trades about -0.09 of its potential returns per unit of risk. Balco Group AB is currently generating about -0.48 per unit of risk. If you would invest 12,280 in Alimak Hek Group on September 3, 2024 and sell it today you would lose (340.00) from holding Alimak Hek Group or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Balco Group AB
Performance |
| Timeline |
| Alimak Hek Group |
| Balco Group AB |
Alimak Hek and Balco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Balco Group
The main advantage of trading using opposite Alimak Hek and Balco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Balco Group 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 Balco Group will offset losses from the drop in Balco Group's long position.| Alimak Hek vs. Inwido AB | Alimak Hek vs. Bufab Holding AB | Alimak Hek vs. Cloetta AB | Alimak Hek vs. Dometic Group AB |
| Balco Group vs. Inwido AB | Balco Group vs. Nordic Waterproofing Holding | Balco Group vs. Alimak Hek Group | Balco Group vs. Ferronordic 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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