Correlation Between Alimak Hek and Bufab Holding
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Bufab Holding 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 Bufab Holding 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 Bufab Holding AB, you can compare the effects of market volatilities on Alimak Hek and Bufab Holding 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 Bufab Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Bufab Holding.
Diversification Opportunities for Alimak Hek and Bufab Holding
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimak and Bufab is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Bufab Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bufab Holding 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 Bufab Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bufab Holding AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Bufab Holding go up and down completely randomly.
Pair Corralation between Alimak Hek and Bufab Holding
Assuming the 90 days trading horizon Alimak Hek is expected to generate 3.34 times less return on investment than Bufab Holding. But when comparing it to its historical volatility, Alimak Hek Group is 1.07 times less risky than Bufab Holding. It trades about 0.07 of its potential returns per unit of risk. Bufab Holding AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 39,000 in Bufab Holding AB on August 27, 2024 and sell it today you would earn a total of 2,700 from holding Bufab Holding AB or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimak Hek Group vs. Bufab Holding AB
Performance |
| Timeline |
| Alimak Hek Group |
| Bufab Holding AB |
Alimak Hek and Bufab Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Bufab Holding
The main advantage of trading using opposite Alimak Hek and Bufab Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Bufab Holding 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 Bufab Holding will offset losses from the drop in Bufab Holding'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 |
| Bufab Holding vs. Addtech AB | Bufab Holding vs. Teqnion AB | Bufab Holding vs. Vitec Software Group | Bufab Holding vs. Lagercrantz Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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