Correlation Between Addnode Group and BTS Group
Can any of the company-specific risk be diversified away by investing in both Addnode Group and BTS 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 Addnode Group and BTS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addnode Group AB and BTS Group AB, you can compare the effects of market volatilities on Addnode Group and BTS 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 Addnode Group with a short position of BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addnode Group and BTS Group.
Diversification Opportunities for Addnode Group and BTS Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addnode and BTS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Addnode Group AB and BTS Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group AB and Addnode Group 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 Addnode Group AB are associated (or correlated) with BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group AB has no effect on the direction of Addnode Group i.e., Addnode Group and BTS Group go up and down completely randomly.
Pair Corralation between Addnode Group and BTS Group
Assuming the 90 days trading horizon Addnode Group AB is expected to generate 1.07 times more return on investment than BTS Group. However, Addnode Group is 1.07 times more volatile than BTS Group AB. It trades about 0.04 of its potential returns per unit of risk. BTS Group AB is currently generating about 0.02 per unit of risk. If you would invest 8,134 in Addnode Group AB on August 28, 2024 and sell it today you would earn a total of 1,986 from holding Addnode Group AB or generate 24.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addnode Group AB vs. BTS Group AB
Performance |
| Timeline |
| Addnode Group AB |
| BTS Group AB |
Addnode Group and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addnode Group and BTS Group
The main advantage of trading using opposite Addnode Group and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addnode Group position performs unexpectedly, BTS 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 BTS Group will offset losses from the drop in BTS Group's long position.| Addnode Group vs. Svedbergs i Dalstorp | Addnode Group vs. Know IT AB | Addnode Group vs. FormPipe Software AB |
| BTS Group vs. Biotage AB | BTS Group vs. Addnode Group AB | BTS Group vs. Beijer Ref AB | BTS Group vs. CellaVision 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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