Correlation Between Alimak Hek and Starbreeze
Can any of the company-specific risk be diversified away by investing in both Alimak Hek and Starbreeze 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 Starbreeze 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 Starbreeze AB, you can compare the effects of market volatilities on Alimak Hek and Starbreeze 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 Starbreeze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimak Hek and Starbreeze.
Diversification Opportunities for Alimak Hek and Starbreeze
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimak and Starbreeze is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alimak Hek Group and Starbreeze AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbreeze 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 Starbreeze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbreeze AB has no effect on the direction of Alimak Hek i.e., Alimak Hek and Starbreeze go up and down completely randomly.
Pair Corralation between Alimak Hek and Starbreeze
Assuming the 90 days trading horizon Alimak Hek Group is expected to generate 0.37 times more return on investment than Starbreeze. However, Alimak Hek Group is 2.69 times less risky than Starbreeze. It trades about 0.03 of its potential returns per unit of risk. Starbreeze AB is currently generating about -0.09 per unit of risk. If you would invest 11,420 in Alimak Hek Group on September 1, 2024 and sell it today you would earn a total of 520.00 from holding Alimak Hek Group or generate 4.55% 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. Starbreeze AB
Performance |
| Timeline |
| Alimak Hek Group |
| Starbreeze AB |
Alimak Hek and Starbreeze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimak Hek and Starbreeze
The main advantage of trading using opposite Alimak Hek and Starbreeze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimak Hek position performs unexpectedly, Starbreeze 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 Starbreeze will offset losses from the drop in Starbreeze's long position.| Alimak Hek vs. Samhllsbyggnadsbolaget i Norden | Alimak Hek vs. Sinch AB | Alimak Hek vs. Embracer Group AB | Alimak Hek vs. Evolution AB |
| Starbreeze vs. MilDef Group AB | Starbreeze vs. Fractal Gaming Group | Starbreeze vs. KABE Group AB | Starbreeze vs. IAR Systems Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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